US President Barack Obama and Israeli Prime Minister Benjamin Netanyahu have admitted their differences on the Middle East peace issues.

The talks came after Obama said in his speech on Thursday that any future Palestinian state must be based on the borders that existed prior to the 1967 war.

Netanyahu said there can be some allowances but stressed the 1967 lines were indefensible.

He said that there could be no peace based on illusions and added that “It will crash eventually on the rocks of Middle Eastern reality.

Palestinian leader Mahmoud Abbas has urged Obama to continue pressing Netanyahu on the 1967 borders plans.

Obama said there were differences between US and Israel on a future state for Palestinians, but these disputes occurred between friends. Netanyahu also admitted to having differences with the US “here and there on the peace process.

Netanyahu, also an Israeli nationalist leader, believes that Palestinians want a state which is really the Jewish homeland. In the 1990s he fell out with President Bill Clinton on this issue.

Although, Netanyahu was more comfortable with President George W. Bush in 2004 who offered Israel that it would not have to pull back to the 1967 borders.

Rejecting Obama's plan, Netanyahu said that, They do not take into account certain demographic changes of the ground that have taken place over the last 44 years.

Obama and Netanyahu kept it positive in public remarks after their Friday meeting, repeating that the US-Israeli relationship is unbreakable and that America is in support of Israel's defense.

Obama did not bring up the matter of the borders in his joint conference with Netanyahu, reports said.

He said true peace could only occur if Israel was allowed to defend itself against the threats in its neighborhood.

Earlier, President Obama was furious when Netanyahu scoffed at his call for Israel to stop building homes for Jews on occupied land.

Obama said Palestinians faced tough choices following the recent reconciliation deal between Fatah, which runs the West Bank, and Hamas, which governs Gaza and still denies Israel's right to exist.