Prime Minister Binyamin Netanyahu's use of the words "two states for two peoples" at the start of the weekly cabinet meeting was "most certainly" the result of intensive efforts by the US to restart the diplomatic process with the Palestinians, senior diplomatic officials said Sunday. For the first time since being sworn into office 95 days ago, and on the eve of yet another meeting between Defense Minister Ehud Barak and US Mideast envoy George Mitchell, Netanyahu uttered the "magic formula" Washington had been urging him to say to his cabinet for months. The Palestinians have conditioned discussions with the Netanyahu government on an Israeli commitment to two states, as well as a settlement freeze. The conditions of that freeze, and what exactly it means, are being worked out in the meetings between Barak and Mitchell. Barak flew to London on Sunday for a meeting with Mitchell, their second in a week. He met with Mitchell last Tuesday in New York. Before setting off, Barak said the meeting with Mitchell was "a bid to advance a broader understanding between us and the US concerning the peace process." The peace process, Barak said, included "the regional comprehensive solution we greatly support, and also how to translate the road map - which Israel has accepted with reservations and understandings - to a way which will be agreed upon by us, the US, and the other parties, in order to move the peace process forward and to create an opening for the Palestinians." During the last meeting, Barak discussed with Mitchell linking an agreement on the settlement issue with the Arab states taking steps now to normalize relations with Israel. Meanwhile, Netanyahu - who refrained from saying "two states for two peoples" during his meeting with US President Barack Obama in May, and in his Bar-Ilan University speech in June - pronounced the words in the context of reviewing his first 100 days in office at Sunday's cabinet meeting. "I can't say that we had 100 days of grace, but we are not complaining, because we have many achievements," the prime minister said. First and foremost was the establishment of a national unity government that "brought national consensus to the idea of two states for two peoples," he said. An agreement on this, he stressed, will necessitate the Palestinians recognizing Israel as the "state of the Jewish people," something that means the refugee issue will "be solved outside Israel's borders." Such an agreement would also mean that "Israel needs and will receive defensible borders which include a full demilitarization of the Palestinian territory," Netanyahu said. His comments on "two states for two peoples" were more explicit than what he said at Bar-Ilan University, when he outlined his vision of peace "in this small land of ours" in which "two peoples will live freely, side-by-side, as good neighbors with mutual respect. Each will have its own flag, its own anthem, its own government. Neither will threaten the security or survival of the other." During that speech, he said that if Israel received guarantees of demilitarization and if the Palestinians recognized Israel as state of the Jewish people, "then we will be ready in a future peace agreement to reach a solution where a demilitarized Palestinian state exists alongside the Jewish state." In interviews with the foreign press after that speech, he spoke of a willingness to have a Palestinian state next to a Jewish one, but diplomatic officials said his use of the "two states for two people" formula in Sunday's cabinet meeting was not coincidental, and linked to an overall package the US is trying to put together to relaunch negotiations. In addition to the establishment of a unity government and national consensus on two states for two peoples, Netanyahu told the cabinet that another major achievement was the quiet in the South. "Granted, Operation Cast Lead gave a wide foundation for the quiet, but the quiet is also a result of our aggressive efforts. I gave directives to respond in an aggressive manner to every rocket attack," Netanyahu said. The prime minister's top adviser, Ron Dermer, said last week in an interview with The Jerusalem Post that Netanyahu had succeeded in bringing "a level of security to the country," and that "people forget that it was only a few months ago that we were fighting a war, or very large military operation, in Gaza. It seems like years ago because of the quiet that you've had in the last three months." Although saying he did not know "why it's quiet now, and I don't know exactly how long it's going to last," Dermer added that Netanyahu had "made it clear on a number of occasions that he won't have any tolerance for attacks against Israel. Not only will he not accept a hail of rockets, he will not accept a drizzle of rockets on Israel's citizens. And I think people on the other side get that message." Dermer said the prime minister "made it clear from the get-go, the first week [after the government was established on March 31], in every type of meeting, with diplomatic interlocutors, with all relevant officials, that we're not going to tolerate it, we're not going to tolerate even a drizzle, those were the exact words he used at the time." Habayit Hayehudi faction chairman Zevulun Orlev slammed Netanyahu for saying "two states for two peoples." He called on the prime minister to stop "surrendering" to American and European pressure. "I am sorry that Netanyahu's opinions have steamrolled down a slippery slope," Orlev said. "Kadima's agenda has no majority in the current coalition." The prime minister was also criticized by opposition MKs. National Union chairman Ya'acov Katz said that had Netanyahu said what he said at Sunday's cabinet meeting during the election campaign, he would not be prime minister today. "He was elected to prevent the establishment of a Palestinian state and now he declares that there is a consensus on two states for two peoples," National Union MK Arye Eldad said. "But Netanyahu knows that the only consensus now is that he is a weak leader who crumbles under pressure and will do anything to suck up the American administration." Netanyahu received praise from left-wing lawmakers and the founders of the Geneva initiative. But Kadima leader Tzipi Livni's associates reacted with skepticism. "It is ironic that he says he obtained a consensus on two states for two peoples when the only one who has changed his mind about the matter is him," a Livni associate said. "The test is not in Netanyahu's words but his actions, and unfortunately, he has not done anything yet." Meanwhile, Chief of General Staff Lt.-Gen. Gabi Ashkenazi briefed the cabinet for the first time since it was sworn in on the overall security situation, stressing that the lessons of the Second Lebanon War had been learned and implemented, as was apparent by the IDF's performance during Cast Lead in the Gaza Strip. During the cabinet discussion, both Netanyahu and Barak referred to the situation in Lebanon, and what appears attempts to legitimize Hizbullah, stressing that Israel will hold the Lebanese government responsible for any Hizbullah aggression against Israel. It was the second time in a week that Netanyahu made this type of statement.