Israeli PM says Jerusalem will never be divided

JERUSALEM (Reuters) - Israeli Prime Minister Benjamin Netanyahu said on Thursday that Jerusalem would remain the capital of Israel and would "never be divided".

Palestinians seeking to establish their own state alongside Israel in a future peace agreement want their capital to be in Jerusalem.

Netanyahu met U.S. President Barack Obama this week for their first talks since both men took office earlier this year.

Speaking at a Jerusalem Day ceremony marking Israel's capture of the Arab Eastern half of the city in the 1967 Middle East War, Netanyahu said "it was important for me to return ... and say here what I said in the United States".

"A united Jerusalem is the capital of Israel. Jerusalem was and will always be ours. It shall never be divided and disunited again," Netanyahu said.

Netanyahu said that only Israeli sovereignty over a united Jerusalem would ensure free religious practice and access to holy sites by the three major faiths."

Palestinian negotiator Saeb Erekat said Netanyahu's position on Jerusalem was a setback to the goal of a two-state solution, which is strongly supported by the Obama administration.

"Mr. Netanyahu, by saying that, he's saying the state of conflict will be eternal," Erekat said.

"We are faced with real non-negotiators," he said.