JERUSALEM (AP) âÄî Incoming Prime Minister Benjamin Netanyahu said Wednesday his government will be a “partner for peace with the Palestinians,” the latest sign that the new Israeli leader is softening his stand as he prepares to take office next week. Netanyahu, who has been skeptical of past peace efforts, delivered his pledge a day after President Barack Obama said the U.S. will push for creation of a Palestinian state. The prime minister-designate said he will seek parliamentary approval for his new government next week. Then he would take over as head of a government dominated by hawkish parties, but potentially moderated by the presence of the centrist Labor Party. Labor has been at the forefront of Mideast peace efforts, while Netanyahu has a record of rebuffing peace moves that require Israeli concessions. To entice a reluctant Labor into his coalition, Netanyahu had to promise to pursue peace with the Palestinians, but stopped short of pledging to work for creation of a Palestinian state âÄî a cornerstone of peace plans for more than a decade. In the campaign before the Feb. 10 election that propelled him toward the premiership, Netanyahu disparaged talks on a peace treaty, saying the proper approach was to first build up the Palestinian economy. Palestinian leaders rejected that, and during her visit here this month, Secretary of State Hillary Rodham Clinton made a point of calling for creation of a Palestinian state at every opportunity. That set up a possible head-on clash between Israel and its most powerful ally, but Netanyahu insists this won’t happen and put a positive face on the situation in a speech to a joint Israeli-Palestinian economic conference. Peace is a “common and enduring goal for all Israelis and Israeli governments, mine included,” Netanyahu said. “This means I will negotiate with the Palestinian Authority for peace.” He said the Palestinians “should understand that they have in our government a partner for peace, for security, for the rapid development of the Palestinian economy.” In the West Bank, officials in the Western-backed government of President Mahmoud Abbas were skeptical, and spokesman Nabil Abu Rdeneh dismissed Netanyahu’s call for economic development. “Any solutions with other slogans and titles are only an attempt to escape the commitments of the peace process,” he said, listing the main issues in negotiations for a state: borders, settlements and Jerusalem. At a news conference Tuesday, Obama said the makeup of the new Israeli government was still unclear, and peacemaking is “not easier than it was, but I think it’s just as necessary.” Besides Labor, Netanyahu’s main partner is Yisrael Beitenu. Its leader and designated foreign minister, Avigdor Lieberman, has drawn allegations of racism for a proposal that could end up stripping Israeli Arabs of their citizenship unless they declare their loyalty to the Jewish state. Another coalition partner, the ultra-Orthodox Jewish Shas Party, objects to even discussing sharing Jerusalem with the Palestinians. As of now, Netanyahu has enlisted parties with 69 of the 120 seats in parliament for his coalition, and he may sign up one or two more small hawkish factions. His main rival, Foreign Minister Tzipi Livni of the Kadima Party, insisted she will stay out, referring to herself as the future head of the parliamentary opposition. “I have no doubt that the public wouldn’t want to see us buried in the government without being able to substantially influence its policies, and we will present our views every day in the opposition,” she told Channel 2 TV, after earlier describing the incoming team as “conceived in sin.” Kadima won 28 seats, one more than Netanyahu’s Likud. Labor has just 13 seats, a small minority in the coalition. After its vote Tuesday to join Netanyahu’s coalition, there was hot debate about whether Labor could actually moderate the government’s policies toward the Palestinians, or serve only as an image-improving factor. Much could depend on the role of Labor leader Ehud Barak, set to be reappointed defense minister. During his current term under Prime Minister Ehud Olmert, he failed to remove unauthorized settlement outposts or significantly ease restrictions of movement in the West Bank, despite U.S. demands. As prime minister in 2000, he proposed withdrawing from almost all of the West Bank in failed peace talks hosted by then-President Bill Clinton. Although he is Israel’s most-decorated soldier and served as military chief of staff before entering politics, Barak is not a popular figure, and is seen by critics as a cold, self-centered schemer. They charge he led his party into Netanyahu’s government to preserve his own status as defense minister. Barak insisted that his party’s presence “will be the counterweight that will guarantee that we won’t have a narrow right-wing government.” Shlomo Avineri, a professor of political science at the Hebrew University of Jerusalem and former director of the Foreign Ministry, said it was unclear if Labor could wield any influence, but “it is certainly going to be a less extreme government than the one that appeared to be in the cards just a week ago.” In the past, broad-based Israeli governments bringing rivals together have been unable to govern effectively because of their ideological splits. While the current differences might stymie peace efforts, there is broader agreement on economic and domestic policies, holding out promise for measures to counter Israel’s economic downturn.