He said Israel left Gaza, uprooting settlements in 2005 to international applause, but was rewarded with a takeover of Gaza, and rocket attacks, by the militant Hamas.

“Israel is prepared to have a Palestinian state in the West Bank, but we’re not prepared to have another Gaza there. And that’s why we need to have real security arrangements, which the Palestinians simply refuse to negotiate with us,” said Netanyahu.

He said the core issue of the conflict is not settlements, but the Palestinians’ refusal to accept a Jewish state in any borders.

Netanyahu renewed a challenge to Abbas to reopen negotiations without preconditions this week, while they are both in New York.

"Who’s there to stop us? What is there to stop us? If we genuinely want peace, what is there to stop us from meeting today and beginning peace negotiations?” asked Netanyahu.

The Security Council may take weeks, or even months, to act on the statehood application.

In the meantime, the United States and the other members of the Middle East Quartet - the European Union, Russia and the United Nations - offered a new proposal for direct talks Friday.

They called for the two parties to come up with comprehensive proposals on territory and security within three months, and to reach a final deal no later than the end of 2012. The Quartet will hold a conference in Moscow to press a deal, and there would be a separate donor conference to boost Palestinian state-building efforts.

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