Barack Obama has warned Israel that it is losing international credibility due to Benjamin Netanyahu's terms for diplomacy that might lead to a Palestinian state.

In an interview with Israel TV Channel 2, the Obama hinted that a continued US umbrella for Israel at the UN over the Palestine dispute may be reviewed due to Prime Minister Netanyahu's policies.

In the interview, he said: "I don't see the likelihood of a framework agreement. The question is how do we create some building blocks of trust and progress."

Obama told the Uvda (Fact) programme that Netanyahu's position "has so many caveats, so many conditions that it is not realistic to think that those conditions would be met at any time in the near future.

"So the danger is that Israel as a whole loses credibility. Already, the international community does not believe that Israel is serious about a two-state solution."

He also said now was the time for a re-evaluation of "how we approach defending Israel on the international stage around the Palestinian issue".

Until now, the US had vetoed any resolution that appeared to go against Israel. However, Obama said: "Well, here's the challenge. If in fact there is no prospect of an actual peace process, if nobody believes there is a peace process, then it becomes more difficult to argue with those who are concerned about settlement construction, those who are concerned about the current situation.

"It is more difficult for me to say to them: 'Be patient, wait, because we have a process here.'"