Netanyahu has, with evident distaste, bowed to U.S. pressure to talk of negotiating the creation of a Palestinian state, but only if it is demilitarized and if Palestinians recognize Israel as a Jewish state.
Here's a video of Netanyahu speaking at Bar Ilan University on June 14, 2009 where he called for a Palestinian state (begin 8:27):
The spitting and nausea is obvious, yes?
Now compare with PA President Mahmoud Abbas speaking to the Palestinian Youth Parliament on April 27, 2009:
Cool and conciliatory, yes?