Israeli Prime Minister Benjamin Netanyahu on Sunday paid lip service for probably the first time in public to the term of "two states for two peoples" regarding the historical peace process with the Palestinians.

"For the first time we have reached a national agreement on the two states for two peoples concept," local news service Ynet quoted Netanyahu as saying at the start of Sunday's cabinet meeting, while noting that the traditionally hawkish premier refrained in the past from mentioning the term on public occasions.

"The Palestinians will have to recognize the State of Israel as the state of the Jewish people, and the refugee problem will be solved outside Israel," he said. "Israel needs and will receive defensible borders, including a complete demilitarization of the Palestinian territory."

Such demands mirrored those Netanyahu raised in a major diplomatic policy speech last month, during which he offered tentative endorsement of the establishment of a demilitarized Palestinian state alongside Israel, while stopping short of any reference to the exact phrase.

The two-state principle envisions a peaceful coexistence of Israel and a Palestinian state side by side, and has garnered extensive support from the international community. Recent opinion polls showed that a majority of Israelis support such a solution to the decades-old conflict.

(Xinhua News Agency July 6, 2009)