WASHINGTON: US President Barack Obama voiced support for creation of a Palestinian state in talks yesterday with Israeli Prime Minister Benjamin Netanyahu, who held back from endorsing the main cornerstone of Washington’s Mideast policy.

“We talked about restarting serious negotiations on issues of Israel and the Palestinians,” Obama said, adding that it was in the interests of both sides “to achieve a two-state solution.” Obama, speaking along with Netanyahu to reporters in the Oval Office, also reminded Israel of its commitment, under a 2003 US-backed peace road map to cease settlement activity in the occupied West Bank.

Netanyahu, in his remarks, reiterated that he supported self-government for the Palestinians but made no mention of a state, a position underscoring a rare rift in US-Israeli relations.

“We don’t want to govern the Palestinians. We want them to govern themselves,” Netanyahu said, echoing statements he has made in the past.

To underscore the differences, Israel has moved ahead with construction at a new Jewish settlement deep in the West Bank. The new construction is set to take place at Maskiot, a former army camp in the arid Jordan Valley region of the West Bank where 10 families now live in trailers. Authorities have begun to build infrastructure for permanent homes, local government head David Elhaiini said. Contractors were taken on a tour of the site on Sunday.

Construction was approved by Defense Minister Ehud Barak in July 2008 and the timing of the new stage was not intended to make a political point, he said. “The whole process is being carried out in keeping with the law, and we had no idea about the timing,” Elhaiini said, referring to the Obama-Netanyahu meeting.

The Iranian issue loomed large over the White House talks. Obama said after the meeting he saw no reasons to set an artificial deadline for diplomacy with Iran, but the United States would like to see progress with Tehran by the end of the year.