Israeli PM says conflict not about territory, days after Arabs sweeten land-for-peace proposal

Israel's prime minister appears to be giving a cool reception to a new peace proposal from the Arab world.

Benjamin Netanyahu said Wednesday that the conflict with the Palestinians is not about territory. Instead, he says the Palestinians must recognize Israel as the Jewish homeland.

It was his first public statement on the matter since the Arab League this week modified a 2002 initiative, offering comprehensive peace with Israel in exchange for a complete withdrawal from occupied territories with small land swaps.

He did not address it directly, but his comments took aim at its central plank, exchanging occupied land for peace.

Speaking to Israeli diplomats, he said "the root of the conflict isn't territorial. It began way before 1967," the year Israel captured the territories claimed by the Palestinians.