Israeli Prime Minister Binyamin Netanyahu, addressing Congress on Tuesday, laid out a vision for Middle East peace that he said would include an unspecified “far-reaching compromise” by Israel if the Palestinians accept his country as a Jewish state.

In a speech punctuated by standing ovations from supportive U.S. lawmakers, Netanyahu repeated his insistence that Israel would not accept a return to “indefensible” borders that existed before the 1967 Arab-Israeli war, and he ruled out allowing Palestinian refugees to return to Israel or giving up any part of Jerusalem. He also vowed that Israel would not negotiate with a Palestinian government that includes the Islamist militant group Hamas, which controls the Gaza Strip and recently reconciled with the mainstream Fatah administration in the West Bank.

But, declaring that Israel must “find a way to forge a lasting peace with the Palestinians,” Netanyahu said: “I am willing to make painful compromises to achieve this historic peace.” He said he recognizes “that in a genuine peace, we’ll be required to give up parts of the ancestral Jewish homeland.”

Netanyahu blamed the Palestinians for the failure to end the long-running conflict so far, saying they have been “unwilling to accept a Palestinian state if it meant accepting a Jewish state alongside it.” He challenged Palestinian President Mahmoud Abbas “to stand before his people and say, ‘I will accept a Jewish state,’ ” just as he said he had done in saying he would accept a Palestinian state.

In the West Bank, a spokesman for Abbas said there was “nothing new” in the speech, which he cast as a rebuff to President Obama.

“On the contrary, he [Netanyahu] added more obstacles,” Nabil Abu Rudeineh said in a telephone interview. “It was a clear message to President Obama, refusing all his ideas, and a message to everybody that he is not ready for peace.” Abu Rudeineh added: “He’s trying to negotiate alone in front of the Congress and conclude an agreement without sitting at the table and without accepting the parameters of Obama. These preconditions are not going to lead to any peace moves.”

Another Abbas aide said Netanyahu’s terms amount to a “declaration of war” on the Palestinians, the Associated Press reported.

Saeb Erekat, the chief Palestinian negotiator, told the Arabic satellite channel al-Jazeera that Netanyahu chose “dictation over negotiation.” The speech showed that “we have no partner in Israel for peacemaking,” Erekat said. Other Palestinian officials said Netanyahu’s conditions made genuine peace talks impossible.

In Israel, commentators also said that the speech broke little new ground. Netanyahu reiterated points he made in an address to the Israeli parliament last week, in which he implied flexibility on territory while outlining positions that Palestinian leaders have rejected outright.

With Palestinian acceptance of a Jewish state, “the Israeli people will be prepared to make a far-reaching compromise,” Netanyahu said. “I will be prepared to make a far-reaching compromise.”

He stressed that such a compromise “must reflect the dramatic demographic changes that have occurred since 1967,” meaning that Israel’s final borders must include densely populated Israeli settlements in the West Bank as well as “other places of critical strategic and national importance” to Israel. Without going into detail, he pledged to be “generous” about the area of a future Palestinian state.

“Israel will be generous on the size of a Palestinian state, but we’ll be very firm on where we put the borders with it,” he said. “We recognize that a Palestinian state must be big enough to be viable, to be independent, to be prosperous.” But he omitted the word “contiguous,” used by President Obama to indicate that Israeli settlements should not jut deep into West Bank territory.

Netanyahu told the Israeli parliament last week that large Jewish settlement blocs in the West Bank should “remain inside the borders of the State of Israel” in a future peace deal, implying that other areas could be ceded to the Palestinians. He repeated that position in Congress, adding that in a future agreement “some settlements will end up beyond Israel’s borders,” although he did not indicate where they would be. 

The prime minister reiterated that Israel must maintain a long-term military presence along the West Bank’s border with Jordan.

Netanyahu also vowed that Israel would stand by the United States as an “unwavering ally” in a turbulent region undergoing rapid change, and he lashed out against Iran, accusing it of pursuing nuclear weapons and seeking the “annihilation of the Jewish state.”

Netanyahu’s appearance before largely sympathetic U.S. lawmakers came four days after a meeting with Obama at the White House exposed fundamental differences between the Israeli and U.S. leaders over their approaches to an Israeli-Palestinian peace agreement.

Speaking to reporters alongside Obama after a nearly two-hour meeting in the Oval Office, Netanyahu suggested in a lecturing tone that Obama holds an unrealistic view of how to achieve Middle East Peace and vowed that Israel would never pull back to the borders that existed before the June 1967 Arab-Israeli war. The war ended with the Israeli conquest of the West Bank, Gaza Strip, Sinai Peninsula, Golan Heights and other territories, leading to a surge of Israeli settlement-building on occupied land. Israel has since returned the Sinai to Egypt and withdrawn from the Gaza Strip.

A day before the White House meeting, Obama delivered a major speech on the Middle East in which he prodded Israel to pursue a peace deal with the Palestinians “based on the 1967 lines with mutually agreed swaps so that secure and recognized borders are established for both states.” The unspecified land swaps would be intended to accommodate large Israeli settlement blocs in the West Bank.

After the Oval Office meeting and in a speech Monday to the American Israel Public Affairs Committee, Netanyahu described the 1967 borders as “indefensible.” In his remarks Monday, he blamed the Palestinians for the conflict, saying that “they refuse to accept a Jewish state.”

In his own speech before AIPAC on Sunday, Obama sought to reassure Israel and its supporters of “ironclad” U.S. support. But he insisted again that the 1967 borders should be the starting point for talks on a new Palestinian state, while acknowledging that the lines would need to be negotiated to accommodate Israeli settlements and security needs.

Addressing a joint meeting of Congress on Tuesday for the second time as prime minister, Netanyahu was adamant that Israel would not accept the return of Palestinian refugees who were driven from their homes during the 1948 Palestine war that resulted in the establishment of the Jewish state. Palestinian refugees “should have the right to immigrate” to a Palestinian state, he said, meaning that “the Palestinian refu­gee problem will be resolved outside the borders of Israel.”

Netanyahu also ruled out giving up full Israeli sovereignty over Jerusalem, including East Jerusalem, which was captured by Israel in the 1967 war. “Jerusalem must never again be divided,” he said. “Jerusalem must remain the unified capital of Israel.”

He denounced what he described as a Palestinian attempt to “impose a settlement” through recognition of a Palestinian state by the United Nations General Assembly. “Peace cannot be imposed,” he declared. “It must be negotiated.”

But Netanyahu reserved some of his harshest language for Iran, which he characterized as the “foremost” force opposing Middle East peace. He asserted that the government of President Mahmoud Ahmadinejad “sponsors terror worldwide” and is pursuing nuclear weapons.

“Now time is running out,” he said. “The hinge of history may soon turn. For the greatest danger of all may soon be upon us: a militant Islamic regime armed with nuclear weapons.” This, he said, “would give terrorists a nuclear umbrella. It would make the nightmare of nuclear terrorism a clear and present danger throughout the world.”

The Israeli leader’s address was interrupted briefly by a protester whose shouts were quickly drowned out by U.S. lawmakers. Netanyahu said he took the outburst “as a badge of honor,” adding: “You can’t have these protests in the farcical parliaments in Tehran or Tripoli. This is real democracy.”

Drawing one of many standing ovations, he told the assembled members of Congress: “Israel has no better friend than America, and America has no better friend than Israel.” He called his country “the one anchor of stability in a region of shifting alliances” and asserted: “Israel is not what is wrong about the Middle East; Israel is what is right about the Middle East.”

Reacting to the speech, Jewish settlers and some members of Netanyahu’s Likud party said they were concerned about his suggestions that Israel could make generous territorial concessions in the West Bank.

“There is no majority in the Likud to cede large portions of Judea and Samaria,” said Danny Danon, a hawkish Likud lawmaker, referring to the West Bank by its biblical name. 

Benny Katzover, a settler leader, accused Netanyahu in a television interview of “bargaining away the Jewish homeland” and planning “to uproot 100,000 Jews” who live in outlying settlements outside the major settlement blocs in the West Bank.

Correspondent Joel Greenberg in Jerusalem contributed to this report.