Despite remarks made by Prime Minister Binyamin Netanyahu in which the premier emphasized his position that settlements should expand to provide for natural growth, Secretary of State Hillary Clinton said on Wednesday that the United States was opposed to any construction in the West Bank.

"The president [Barack Obama] was very clear when Netanyahu was here - not settlements, not outposts, not natural growth expansion," she told reporters at the White House.

Earlier on Wednesday, Netanyahu insisted that Israel was committed to agreements signed by previous governments and will strive towards peace, adding that Israel and the US "saw eye-to-eye" on the regional initiatives promoted by Obama.

"There is an opportunity here, and there may be an opportunity for peace," Netanyahu said in a speech to the Knesset during a deliberation of the government's economic policy. "Previous governments have so far been unable to bring peace, which has receded under a rain rockets and missiles."

Netanyahu praised Obama's push to revise the original Arab peace initiative in order to facilitate a regional agreement that would allow normalization between Israel and the entire Arab world.

"The partnership of the Arab countries will bolster peace and give both us and the Palestinians stability," Netanyahu said, before alluding to the Iranian nuclear program, which many Arab countries also consider a threat. "In the Middle East there are threats which threaten us all. We have the opportunity to broaden the circle of peace and I'm glad that President Obama sees eye to eye with us on this opportunity."

Netanyahu said that Israel "welcomes" Obama's initiatives. "This is a new and refreshing thing that completely corresponds with our views."

The prime minister, however, reiterated his insistence on "economic peace" and the need to first focus on "changing the situation on the ground."

"We are acting to promote economic projects in the Palestinian Authority," he said. "There is an opportunity to induce investments by third-party countries in Europe, Asia and the Arab world. We will act and do what is necessary in order to change the economic situation."

Netanyahu said that his government was "bound to the diplomatic and international agreements signed by previous Israeli governments," adding, "we expect that others respect their commitments as well.

"We wish to see an end to the conflict and want reciprocity regarding the demands of both sides and their implementation. We recognize international obligations. We will take concrete steps towards peace with the Palestinians and expect them to take similar steps. It would be good for the Arab states to take symbolic and concrete steps towards normalization, not later but rather now."

Opposition leader Tzipi Livni spoke directly after the prime minister, slamming him and his government's policies.

"You're a wonderful speaker," she began, "but your performance isn't all that… If there's one thing you have managed to do, it has been to make all Israeli citizens worried."

She reiterated previous criticism of the size of Netanyahu's government, saying "there is no government in Jerusalem. There are ministers and new assistants in the hundreds, but there is no government and there is no vision in any field."

Livni accused Netanyahu of acting out of fear, saying "I didn't understand why you were compelled to sell out on women's rights, why you need to give Israel Beiteinu everything they've ever dreamed of, and then I realized - you're scared."

Such fear, she charged was the "one common denominator" motivating the new go