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Netanyahu declares Israel will act unilaterally if Palestinians declare state

In a speech given at the Saban Forum in Jerusalem yesterday, Prime Minister Netanyahu announced that if the Palestinians unilaterally declare a state, Israel would also take unilateral acts. Stressing his interest in reaching a final agreement, he said:
There is no substitute for negotiations between Israel and the Palestinian Authority, and any unilateral attempt outside that framework will unravel the existing agreements between us, and could entail unilateral steps by Israel.
Prior to Netanyahu's speech, former President Bill Clinton pleaded for Israelis to work with President Obama.
From Ma'ariv:
Clinton said: You must not think that Obama is an enemy. Certainly Hillary is not. You should know that there is no American president who can serve with a clean conscience without being committed to Israel and its security. The US administration will not make you do anything you don't want to do. The United States and President Obama are committed to Israel's security.
Yedioth Ahronoth reports today that Netanyahu's advisors have said that a unilateral declaration by the Palestinians would effectively cancel previous agreements such as the Oslo Accords, though sources in the Prime Minister's Bureau have said that "even if political and economic agreements with the Palestinians were to be effectively canceled in response to the declaration of a Palestinian state-Israel would not restore the situation to its previous state and would not take actions to 'turn back the wheel.'"
Yedioth Ahronoth also reports that Netanyahu is considering annexing settlements in the West Bank in response to unilateral declarations.
Netanyahu is examining a more extreme option: Applying Israeli sovereignty to the settlement blocs, such as Maale Adumim and the greater Jerusalem area. Senior ministers in the forum of seven are pressing Netanyahu to present a price tag to the Palestinians that will serve as a warning sign that will be uppermost in their mind when they consider declaring a Palestinian state.
In Haaretz today, Aluf Benn opines that this confrontation is just yet another recycled confrontation that has appeared throughout the history of negotiations between Israel and the Palestinians.
It appears that this time, too, the Palestinian threat reflects frustration more than a practical plan, and the Israeli response reflects fear of international pressure, not a decision to annex territory. From Israel's standpoint, it's good that the Palestinians are threatening to declare their state in accordance with the 1967 borders, meaning that they would put the vision of "two states for two peoples" into practice.
Just a few weeks ago, Palestinian negotiator Saeb Erekat threatened Israel with a one-state solution, forgoing the partitioning of the country in favor of an annexation of the territories into Israel and the demand for civil rights for the Palestinians. For Israel, it's easier to contend with a demand for partition than Palestinian representation in the Knesset.
The Obama administration, which has so far failed to restart peace negotiations, will try to leverage the Palestinian threat and extract concessions from Netanyahu. It's difficult, however, to believe that the United States, even under President Barack Obama, would abandon the peace process and back a unilateral declaration of the establishment of a Palestinian state.
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