Israeli Prime Minister Benjamin Netanyahu has bluntly rejected a call by President Barack Obama for an approximate return to the borders that existed before the 1967 Middle East war.
He told the president such a move is impossible in light of current security concerns and demographic realities.
Mr Netanyahu said Israel wants peace, but peace based on illusions will eventually fail.
They met in Washington on Friday. Mr Obama said in a speech on Thursday that any future Palestinian state must be based on the borders that existed prior to the 1967 war.
Mr Netanyahu said there could be some concessions, but stressed again that the 1967 lines were ''indefensible''.
But he insisted he valued Mr Obama's efforts, saying: ''Israel wants peace.''
Mr Obama said they had discussed the changes sweeping the region and how they affected the security of the US and Israel.
He said the situation meant there were both ''opportunities'' and ''perils''.
Mr Obama said there were differences between the two nations on a future state for Palestinians, but that such disputes occurred between friends.
He said true peace could occur only if Israel was allowed to defend itself against threats.
Mr Netanyahu said: ''While Israel is prepared to make generous compromises for peace, it cannot go back to the 1967 lines because these lines are indefensible.''
Palestinian peace negotiator Saeb Erekat says Mr Netanyahu has chosen settlements over peace.
Mr Erekat says a just and stable two-state solution is critical for peace in the region.