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US President Donald Trump said on Wednesday that all options are on the table when it comes to brokering a resolution to the Israeli-Palestinian conflict, even as he kept alive the possibility that the US will consider moving its Israel embassy to Jerusalem.

“I’m looking at two-state, and one-state, and I like the one that both parties like,” Mr Trump said during a press conference with Israeli prime minister Benjamin Netanyahu.

Mr Netanyahu echoed Mr Trump’s comments, saying: “Rather than deal with labels, I want to deal with substance.”

The two-state solution – under which a Palestinian state would be formed alongside Israel in the Israeli-occupied West Bank, Jerusalem and the Gaza Strip – has been a touchstone of US policy in the region since the signing of the Oslo accords in the early 1990s.

Mr Trump said Wednesday that he was optimistic that a deal could be struck by his administration to resolve one of the world’s most intractable conflicts. “I think we’re going to make a deal,” he said, adding that he would like to see Israel “hold back on settlements for a little bit”. Mr Netanyahu acknowledged that he would discuss the settlement issue with Mr Trump, saying he did not believe the settlements were a driving force of his country’s conflict with Palestine.

During the press conference, Mr Trump also addressed a possible move of the US embassy to Jerusalem from Tel Aviv, where the US and other countries keep their embassies to avoid stoking disputes with Palestine over the city. While an advisor for Mr Trump previously said that doing so would be a “very high priority”, he has not made any moves during his first weeks in office. “I’d love to see that happen,” Mr Trump said. “We’re looking at it very, very strongly.”

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