Israeli PM Benjamin Netanyahu has rejected comments from US President Obama that a future Palestinian state must be based on the 1967 borders. In a major speech to the State Department, Mr Obama said "mutually agreed swaps" would help create "a viable Palestine, and a secure Israel". But Mr Netanyahu said those borders, which existed before the 1967 Middle East war, were "indefensible". Mr Netanyahu is preparing to meet Mr Obama for talks at the White House. An estimated 300,000 Israelis live in settlements built in the West Bank, which lies outside those borders. The settlements are illegal under international law, although Israel disputes this. Seeking solutions In Thursday's speech on the future of US policy in the Middle East, Mr Obama said the basis of the peace negotiations was to create "a viable Palestine, and a secure Israel". "The United States believes that negotiations should result in two states, with permanent Palestinian borders with Israel, Jordan, and Egypt, and permanent Israeli borders with Palestine," he said. "The borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps, so that secure and recognised borders are established for both states." In a statement, Mr Netanyahu's office said he appreciated Mr Obama's "commitment to peace" but that for peace to endure, "the viability of a Palestinian state cannot come at the expense of the viability of the one and only Jewish state". The statement called on Mr Obama to reaffirm commitments he made to Israel in 2004. "Among other things, those commitments relate to Israel not having to withdraw to the 1967 lines which are both indefensible and which would leave major Israeli population centers in Judea and Samaria beyond those lines," it said. "Those commitments also ensure Israel's well-being as a Jewish state by making clear that Palestinian refugees will settle in a future Palestinian state rather than in Israel." The BBC's Wyre Davies in Jerusalem says that while Mr Netanyahu will be warmly welcomed in the US, he is coming under increasing international pressure to ease his objections to a Palestinian state following the unity deal signed between rival Palestinian groups Hamas and Fatah earlier this month. If the unity project holds, says our correspondent, Mr Netanyahu could find himself foundering while other countries embrace fresh Palestinian initiatives. Israel's claim to being the only democratic state in the region has also been undermined by the dramatic developments of the Arab Spring anti-government uprisings, our correspondent adds. The push for democracy began with the overthrowing of Tunisian President Zine al-Abidine Ben Ali in January. Egyptian leader Hosni Mubarak was later toppled in Egypt, with demonstrators in Libya currently working to overthrow dictator Moammar Gaddafi. Similar uprisings are also taking hold in Bahrain, Yemen and Syria. Source: BBC