Amr Moussa (l) with Hamas chief Haniyeh
Amr Moussa (l) with Hamas chief HaniyehIsrael news photo: Flash 90

U.S. President Barack Obama publicly told Prime Minister Binyamin Netanyahu that Israel must accept Palestinian Authority territorial demands, but the Arab world is unhappy after the Israel leader said the suggested “Auschwitz borders’ are indefensible. President Obama did not reply.

Hamas spokesman Sami Abu Zuhri said Netanyahu's remarks showed that "negotiations with Israel were useless and it would be a mistake to continue to count on reaching a compromise." The use of the word “negotiations” has become a PA code word for talks on an agreement accepting Arab conditions for the creation of the Palestinian Authority as a new country within Israel’s borders.

PA Chairman Mahmoud Abbas, head of the Fatah movement and who has signed a new unity agreement with Hamas, said through his spokesman Nabil abu Rudeina that "Netanyahu's position is an official rejection of Mr. Obama's initiative, of international legitimacy and of international law."

Abbas is holding out and has characteristically turned to the Arab League for consultation before directly commenting on the Netanyahu-Obama meeting, but no notice has been given when such a meeting will take place.

Amr Moussa, now running for president of Egypt, has made it clear to CNN that Israel should consider Hamas as a “negotiating partner” because the terrorist party has been reinstated as an official part of the Ramallah-based Palestinian Authority.

"They (Israel) stated before that they cannot negotiate with Abbas because he represents only part of the Palestinians. Now, after the reconciliation, they cannot negotiate with them because part of them is, as they say, a terrorist organization,” he said.

"If they create a third position, you will find the same answer, ‘No, we cannot negotiate with them until they do this and that.’"

The Arab League secretary general reasoned that the recent Muslim uprisings mean that the “old order” with which Israel co-existed no longer is valid and that Israel has to “seize the opportunity” for agreeing to a PA state based on PA demands.