Israeli Prime Minister Benjamin Netanyahu on Tuesday issued a statement declaring that Israel would never surrender the eastern half of Jerusalem to the Palestinians, nor would it return to the pre-1967 borders.
Netanyahu was responding to remarks by Egyptian Foreign Minister Ahmed Aboul Gheit, in which he told visiting Mediterranean foreign ministers that the Israeli leader had relaxed his positions.
According to Gheit, Netanyahu told Egyptian President Hosni Mubarak when the two met last week that Israel was ready to let eastern Jerusalem become the capital of "Palestine" and to surrender 100 percent of the so-called West Bank.
Netanyahu's statement was also seen as a line in the sand for US President Barack Obama, who according to reports is preparing letters to send to both Israel and the Palestinians outlining the terms of renewed peace negotiations.