"State of Palestine is a dream" - Obama


US President Barack Obama says prospects for a two-state solution in the Middle East are "dim" after the Israeli prime minister vowed to oppose a Palestinian state.

Netanyahu's statements angered the White House, even though he has since tried to soften his remark.

Tensions between the US and Israel have been growing as the leaders have wrangled over a number of issues.

But Obama described his relationship with Netanyahu as "businesslike."