Netanyahu embraces peace talks

Israeli Prime Minister-designate Benjamin Netanyahu said yesterday his government would negotiate peace with the Palestinians, but made no mention of their US-backed quest for statehood.

In a speech a day after enlisting the center-left Labour Party into a broad-based administration that could help him avoid friction with Washington over peacemaking, Netanyahu focused on his plans to shore up the Palestinian economy.

"If we have a strong Palestinian economy, that's a strong foundation for peace," said Netanyahu, leader of the right-wing Likud party, pledging to remove some "bureaucratic handicaps" stunting growth.