In remarks before the U.N. General Assembly, Netanyahu challenged Palestinian President Mahmoud Abbas to meet immediately to reopen peace negotiations.
Netanyahu said those pressuring Israel to give up all territory captured in the 1967 Six Day War are ignoring what happened when Israel turned Gaza back to the Palestinians and recent statements by Abbas and other Palestinians decrying the Jewish presence in the area since 1948, when Israel was established, not 1967, when Israel captured the West Bank and Gaza after it was attacked.
He noted U.N. Security Council Resolution 242 does not require Israel to give back all the territory captured in the Six Day War, recognizing the Jewish state needs defensible borders.
Netanyahu said the Jewish settlements on the West Bank are a red herring.
"The settlements are the result of the conflict. … The core of the conflict is the refusal of the Palestinians to recognize any Jewish state in any borders," Netanyahu said, declaring, "It's time to recognize Israel is the Jewish state. … We are called Jews because we come from Judea."
Netanyahu said Israel neither wants the Palestinians to be its "citizens nor its subjects. … The Palestinians deserve a free state of their own but they should be ready to compromise."
Netanyahu pledged Israel would be the first country to welcome the Palestinians to U.N. membership once a real peace is established.
Netanyahu confronted charges Israel is racist, saying it's the Palestinians who are racist.
"The Jewish state of Israel will always protect the rights of all its minorities," he said, adding, "I wish I could say the same thing about the Palestinian state."
Palestinians have said they want their state to be "Jew free -- Judenrein."
"That's ethnic cleansing," Netanyahu said.