Libyan leader Muammar Gadhafi proposed on Wednesday that Israelis and Palestinians should join in a single democratic state that he has called "Isratine." Gadhafi said the single-state solution is in Israel's interests because it would always face strife in the Middle East. He said that he supported the right of Jews to remain, but said that the world should give up on a solution that involves separate states. "If you want to preserve this group, the Jews as an ethnic group, Palestine is not really the right place. The Middle East is a sea of Arabs," he said. "Take them to Alaska or Honolulu or the Hawaiian islands or the Pacific islands and they can live peacefully in an isolated setting." Gadhafi was speaking to an audience of Georgetown University students by videoconference. He also said that Osama bin Laden should be given a chance to make peace. He said that bin Laden has shown signs that he is open to dialogue. He recommended that Obama seek an opening with the terrorist leader who is considered enemy number one in the United States for ordering the Sept. 11, 2001 terrorist attacks. "I think Osama bin Laden is a person who can be given a chance," he said in Arabic through an interpreter. "Maybe he wants peace." Relations between Libya and the United States have warmed since Gadhafi renounced terrorism in 2003 and gave up efforts to develop nuclear weapons. The move ended years of international isolation, though Gadhafi denied in his rambling address that his country had ever been isolated. The talk with students was organized by the university's contemporary Arab studies center and two student groups. In a statement issued before the talk, Georgetown University President John DeGoia said that he supported the invitation to Gadhafi, but he also harshly criticized the Libyan leader. "He is, frankly, a dictator known for decades of shocking brutality, state-sponsored terror, supporting violent insurgents in other countries and, in recent years, positive actions like destroying the country's weapons of mass destruction and voicing opposition to al-Qaida," he said. Georgetown said that the decision had been criticized by Libyans in exile and family members of the victims of the 1988 Pan Am airplane bombing over Lockerbie, Scotland that killed 270 people. Libya accepted responsibility for the bombing and agreed to compensate family members and those of a 1986 attack on a disco in Berlin. Asked by a student if he would apologize to family members during the videoconference, Gadhafi demurred. "My son, my son, this file has been closed," he said. "There is no sense in grave digging." Gadhafi also said that Libya was suffering from the rapid fall in global oil prices and is discussing nationalization of foreign oil assets. "We hope that the prices will go up again, say to $100 a barrel, so that this idea would be discarded, to stop this idea of calling for nationalization," he said.