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Former US president Bill Clinton urged the Palestinians on Sunday to accept America's modification of its anti-settlement policy and return to the bargaining table.
"Take where we are and the reformulation of the settlement issue and find a way [to move forward]," Clinton told a Jerusalem gathering of high level American and Israeli policy makers at the Saban Forum in Jerusalem.
The Palestinians, he warned, were more likely to get a good deal through negotiations. By refusing to talk with Israel, he said, they risked irking the international community, which might then blame them for the stalled peace process.
His words were consistent with the policy of US President Barack Obama's administration, which has backed Israel's call to the Palestinians to open an immediate dialogue without preconditions.
America has said it wants Israel to freeze settlement activity but that Israel's refusal to comply with this demand should not stop the two sides from talking.
"We have to work with the politics we found in Israel just like we have to work with the politics we found with the Palestinians," Clinton said.
He added that he would not be shocked if Netanyahu's government "actually does make some kind of an agreement or makes a proposal that would be beyond anything anyone expects," Clinton said.
He repeated the praise his wife, US Secretary of State Hillary Clinton, made last month with regard to Israel's decision to curb settlement activity.
"This is the first time that any Israeli government has said we will not issue any new permits and not have any new settlements and that should be enough to open the door and start talking," said Clinton.
Both sides, he said, would only benefit from peace.
"You cannot get a divorce and move to another planet," Clinton said.
The Palestinians, he warned the Israelis, are having children at a faster rate. "If you want to be a democracy and a Jewish state you have to cut a deal," he said.
There is a physical danger to a deadlocked peace process, he added. It is only a matter of time, he warned, before Hamas is capable of putting a GPS system on the rockets that it continues to launch from Gaza against Israel's southern border.
"The trajectory of technology is not your friendâ€¦ you need to get this done and you do have partners," said Clinton. It is not too late to make peace.
But in the process, he said, Israel should be careful "not to sound too victimized." It should also believe that America is its friend and remains deeply committed to Israel and its security.
"You should not think that President Obama is your enemy," Clinton said.
He spoke in the aftermath of media reports of a strained relationship between Netanyahu and Obama as well as speculation that the US was about to step away from the peace process.
Clinton, however, stressed that the US, and Obama, remain deeply committed to the peace process.
"I think that when we meet someone new, in any context, we are always looking for clues that will tell us something," said Clinton.
"No American president can serve in good conscience and not be committed to the security of Israel," said Clinton.
"The United States cannot make you do something that you do not want to do," Clinton said. He added that if the US spends federal funds to support Israel's security needs, "then we owe it to you to say what the best way to achieve that security is."
He said that Israel should interpret America's rejection of the Goldstone Report, which accused Israel of war crimes in Gaza, as a strong sign of its commitment to Israel.
For America to be an effective partner in the peace process it is critical that Israel believes and trusts in the deep bonds between the two countries.
"As long as you believe that American is with you at some core emotional level, we can have a conversation about anything. If you ever stop believing that then it does not matter what our position is," he said.
He cautioned Israelis not to "over-analyze the Obama-Netanyahu relationship."
With respect to a nuclear Iran, he said, the largest danger is the nuclear proliferation that would follow Iran's ability to produce weapons of mass destruction.
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