US President Donald Trump has suggested there could be a change in policy regarding Israel and Palestine and that he would be open to a one-state solution.

Speaking at a press conference with Israel's prime minister Benjamin Netanyahu, Trump said: "I'm looking at two-state, one-state, and I like the one that both parties like. ... I can live with either one".

His comments are at odds with decades of US foreign policy backing a two-state solution in which Palestinians aspire to a separate state of their own.

He added: "I thought for a while the two-state [solution] looked to be the easier of the two, but honestly, if Bibi and the Palestinians, if Israel and the Palestinians are happy, I'm happy with the one they like the best."

There have been no proper peace talks between the sides since 2014, and Trump did say that Israel should "hold back" on settlement building "for a little bit".

Approval has been given for the construction of thousands of new homes in West Bank and East Jerusalem in the last few weeks.

Trump has already faced criticism from his casual comment on the possible end of a two-state solution, while The Times of Israel has run an opinion piece by David Horovitz criticising Netanyahu for "chuckling" as Trump made his comments.

During the press conference Netanyahu said Israel must continue its control of the area west of the Jordan River, warning of security pitfall if this did not happen, The Hill reported.

"If we don't, we know what will happen," he said.

"Otherwise we will get another radical Islamic terrorist state in the Palestinian areas exploding the peace, exploding the Middle East."