"I am willing to make painful compromises to achieve this historic peace" with the Palestinians, he told a receptive congressional audience.
"As the leader of Israel, it is my responsibility to lead my people to peace. This is not easy for me. I recognize that in a genuine peace we will be required to give up parts of the Jewish homeland. In Judea and Samaria [the West Bank], the Jewish people are not foreign occupiers. ... This is the land of our forefathers, the land of Israel. ...
"But there is another truth: The Palestinians share this small land with us. We seek a peace in which they will be neither Israel's subjects nor its citizens. They should enjoy a national life of dignity as a free, viable and independent people in their own state."
However, he said, Palestinian leaders "continue to educate their children to hate ... they continue to perpetuate the fantasy that Israel will one day be flooded by the descendants of Palestinian refugees. My friends, this must come to an end."
Palestinian President Mahmoud Abbas "must do what I have done. I stood before my people ... and I said. 'I will accept a Palestinian state.' It is time for President Abbas to stand before his people and say. 'I will accept a Jewish state.' Those six words will change history."
Netnayahu praised the democratic revolutions sweeping Arab regimes and warned of Iran's nuclear ambitions.
Congressional leaders, including U.S. House Speaker John Boehner, R-Ohio, and U.S. Senate Majority Leader Harry Reid, D-Nev., praised the speech.
"For someone who's listened to a lot of speeches ... in the House chamber, I have to say that you've made the all-star team," Reid told the Israeli leader. "That was a terrific delivery."
"You know, we live in a time of instability in the Middle East and around the world," Boehner told Netanyahu, "but the United States has no stronger ally than Israel."