Obama and Netanyahu admit 'differences' on Middle East

US President Barack Obama and Israeli PM Benjamin Netanyahu have admitted to "differences" on the path to Mid-East peace, after they met in Washington.

The talks came after Mr Obama said in a key speech that any future Palestinian state must be based on the borders that existed prior to the 1967 war.

A defiant Mr Netanyahu said there may be some concessions but stressed the 1967 lines were "indefensible".

He said that there could be no peace "based on illusions".

"[It] will crash eventually on the rocks of Middle East reality," Mr Netanyahu said.

After the talks, Palestinian leader Mahmoud Abbas urged Mr Obama to continue pressing Mr Netanyahu on the 1967 borders plan, AFP news agency reported.

Mr Obama said there were differences between the US and Israel on a future state for Palestinians, but that such disputes occurred "between friends".

He did not bring up the matter of the borders in his joint conference with Mr Netanyahu.

Mr Obama said Palestinians faced "tough choices" following the recent reconciliation deal between Fatah, which runs the West Bank, and Hamas, which governs Gaza and still denies Israel's right to exist.

He said true peace could only occur if Israel was allowed to defend itself against threats.

Mr Obama said the pair had also discussed the revolts in a number of Arab countries, and their impact on the security of the US and Israel.

He said the situation meant there were both "opportunities" and "perils".

Mr Netanyahu also admitted that "we may have differences here and there" on the peace process.

He said: "While Israel is prepared to make generous compromises for peace, it cannot go back to the 1967 lines because these lines are indefensible.

"They do not take into account certain demographic changes on the ground that have taken place over the last 44 years."

But Mr Netanyahu insisted he valued Mr Obama's efforts, saying: "Israel wants peace, I want peace."

The BBC's Paul Adams in Washington says the two leaders had tried hard not to show what a difficult encounter this had been.

The reference to the 1967 borders in Mr Obama's speech on Thursday had angered the Israeli government.

Mr Netanyahu believes the formula would isolate Israeli settlements in the West Bank.

US officials told Associated Press news agency a "passionate" Mr Netanyahu had tried to have the section removed from Mr Obama's speech and was incensed when he failed.

One Israeli official travelling to Washington on the plane with Mr Netanyahu said: "There is a feeling that Washington does not understand the reality, doesn't understand what we face."

But Mr Netanyahu has come under increasing pressure as world figures and organisations lined up to back Mr Obama's position.

The Middle East Peace Quartet - which combines the European Union, United Nations and Russia with the US - expressed "strong support" for Mr Obama's plan.

Key European Union leaders also backed Mr Obama's speech.

UK Foreign Secretary William Hague praised President Obama's "clear message that the borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps".

German Chancellor Angela Merkel called it "a good, viable path that both sides should consider".

Arab League chief, Amr Moussa, also called on President Obama to remain committed to the 1967 borders plan.