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Israel to Dismantle Settlements, Recognize Palestinian State

The announcement drew shocked gasps and a tumultuous reception from Israeli members of the press corps. Prime Minister Netanyahu was able to answer only three questions before being escorted out of the press conference room for his own safety.

"The State of Israel was born out of oppression against the Jewish People," the Prime Minister said, speaking in English. "We cannot morally justify inflicting the same oppression on another people, our Palestinian friends."

"What's been happening over the past few decades is just so senseless, so stupid, so counterproductive" Netanyahu added. "It's unbelievable that we didn't do this sooner."

Israel would withdraw from the Golan Heights, the West Bank, and East Jerusalem within weeks, and consider destroying completed sections of the controversial barrier, a 500-mile long concrete wall erected in the West Bank.

When asked about financial and customs restrictions on Gaza, which in recent months had prompted rows as aid flotillas from overseas had clashed with the Israeli navy, the Prime Minister replied that all restrictions had been lifted.

The Prime Minister refused to answer repeated questions from different members of the media asking what had prompted the sudden policy reversal, stating only that it was the "right thing to do."

Security would be fine, he insisted, amid shouts from right-wing reporters.

"The Palestinians get what they want, and deserve, and the terrorists will have nothing to fight for. There will be no terrorist attacks," Netanyahu said, raising his voice above the furor.

Middle East observer Nick Oba, contacted by phone in Chicago, speculated that Benjamin Netanyahu had had a religious epiphany. "It wouldn't be the first instance of something like that happening in that country's history," he said. "Israel is a relatively young state, but its citizens consider their country's history to stretch back thousands of years, to the times of Abraham and the other prophets."

Initial reports indicate that Palestinian Authority President Mahmoud Abbas was "stunned" by the move.

The White House stated that the US was preparing an official statement pending direct confirmation of the story.