Donald Trump says he wants both parties to make compromises if a peace deal is to be achieved between Israel and the Palestinians.

The US President told a news conference his administration supported a peace deal but it was up to Israel and the Palestinians themselves to make it happen.

He said: "I'm looking at two state and one state and I like the one that both parties like. I'm very happy with the one that both parties like.

"I thought for a while the two state looked like the slightly easier of the two, but if Bibi (Netanyahu) and the Palestinians are happy, I'm happy with the one they like the best."

He later added: "The Israelis are going to have to show some flexibility, which is hard, hard to do. They are going to have to show they really want to make a deal.

"I think the Palestinians have to get rid of some of that hate that they are taught from a very young age. Tremendous hate. I've seen what they are taught. It starts in the school room."

He told reporters the US will encourage a deal and he will work very diligently on such a deal but it was up to the parties themselves to achieve it.

"Bigger deal"

Israeli Prime Minister Benjamin Netanyahu, who was visiting the White House for talks, said that rather than deal with labels like "two state", he wanted a deal with "substance".

He said: "Here's the substance. There are two prerequisites for peace that I laid out. They haven't changed. First, the Palestinians must recognise the Jewish state. They have to stop calling for Israel's destruction.

"Second, in any peace agreement, Israel must retain the overriding security control over the entire area west of the Jordan river, because if we don't... we'll get another radical Islamic terrorist state in the Palestinian areas, exploding the peace, exploding the Middle East."

Mr Netanyahu also said he wanted "change" but said it could not happen until the Palestinians recognised Israel's requirements.

Both hinted that discussions were already underway to achieve a "bigger deal" with the involvement of "Arab partners" and "many many countries".

"I think we have some co-operation from some people who would never ever have thought of doing this," said Mr Trump.

The US President said he wanted to see the US embassy move to Jerusalem but his administration were looking at it with "great care".

"We'll see what happens," he said.

The President and his wife Melania had earlier given a warm welcome to the Israeli PM and his wife Sara when they arrived at the White House, with both putting their arms around their guests.

It showed in the news conference with Mr Netanyahu reacting with jokes at some of Mr Trump's comments.

After the President told the Prime Minister he would like to see him "hold back" on settlements in the Palestinian territories and then told him he didn't look very optimistic for a deal, Mr Netanyahu said it was the "art of the deal".