"I think that there is recognition that ultimately there has to be a real and fair solution, and that certainly doesn't include driving out hundreds of thousands of Jews who live in the suburbs of Jerusalem, and in the suburbs of Tel Aviv, in the Ariel bloc," he told The Jerusalem Post. "I think that is unrealistic."
"I think that many recognize that while there are differences inside Israel, there is a common acceptance that the so-called settlement blocs will remain part of Israel in any settlement, and that's where the majority of construction is taking place," he added.
The prime minister did not offer any information on a possible peace plan or diplomatic initiative, but spoke more about explaining the country's position to the world, the Post reported.
He said there would be "many initiatives" and "we'll have an important task in trying to tell the truth to the world."
Netanyahu said the settlement issue is not at the core of the conflict with the Palestinians and the Palestinian issue is not at the core of conflict in the Middle East.
"The core of the conflict is the persistent refusal of the Palestinians to recognize the Jewish state in any boundary," he said.