Israeli Prime Minister Benjamin Netanyahu promised Wednesday to seek a 'historic compromise' between Israelis and Palestinians that would lead to a peaceful resolution of the long-simmering Middle East conflict.

Netanyahu said he was convinced that peace was possible, calling Palestinian Prime Minister Mahmoud Abbas 'my partner in peace' as the two leaders prepared to hold their first direct talks Thursday in nearly two years.

'We recognise that another people shares this land with us,' Netanyahu said at the White House. 'I came here to find an historic compromise that will enable both our peoples to live in peace, security and dignity.'

US President Barack Obama was hosting Netanyahu, Abbas, Egyptian President Hosni Mubarak and Jordanian King Abdullah for a dinner at the White House. Netanyahu and Abbas will formally relaunch the Mideast peace process Thursday at the US State Department.

'We don't seek a brief interlude between two wars,' Netanyahu said. 'We seek a peace that will end the conflict between us, once and for all.'

Obama has challenged both sides to negotiate a final settlement that would create a Palestinian state within one year. Netanyahu said he recognised there were 'many skeptics' of the peace process but that he had 'no doubt that peace is possible'.

Netanyahu said a permanent peace would bring great economic benefits to the Palestinian people, but would have to be 'anchored in security' for Israel in order to succeed.

'We want the skyline of the West Bank to be dominated by apartment towers, not missiles,' Netanyahu said.