Prime Minister Benjamin Netanyahu said Palestinian moves to apply for membership at the International Criminal Court and to seek statehood unilaterally via the UN had pushed the prospects of peace off the table, rendering the prospects of Palestinian statehood irrelevant for the time being.

Speaking to Israel’s Channel 2 news, Netanyahu also discounted the likelihood that he would evacuate West Bank settlements in his next term if reelected, saying the Palestinians had made it impossible to reach a peace deal.

“I don’t see [evacuating settlers] as practical at the moment because any territory we vacate will be grabbed… I don’t see it happening,” he said.

He indicated that he wanted an accommodation with the Palestinians in principle, but that a two-state solution was impractical for now, given Palestinian strategy.

Asked whether he still supported Palestinian statehood, including the dismantling of settlements, Netanyahu replied: “With the terms that they want, at the moment it’s simply out of the question. Any territory that we would evacuate in the current reality, everybody understands, will be grabbed immediately [by extremist forces].”

Netanyahu said the Palestinian strategy had “emptied of all content” his readiness to work for a two-state solution as set out in a landmark speech he gave at Bar-Ilan University in 2009. “I don’t want a binational country… but the Palestinians have chosen confrontation. They’re not going to negotiations. They’re going to the UN, to the International Criminal Court, to sue Israeli soldiers, commanders as war criminals. I mean, seriously, let’s give them the territory? Close our eyes? We did that. It happened in Gaza. We saw what happened. Hamas won.”

Last week the the Palestinian leadership filed paperwork to join the ICC, a move that could open the way to suing Israeli leaders or IDF commanders for war crimes. The move followed the Palestinians’ failure to win a UN Security Council majority for a resolution imposing a three-year time limit for a full Israeli withdrawal to the pre-1967 lines in the West Bank and Jerusalem.

The US and UK voted against the UN resolution, and the ICC move was roundly condemned in Jerusalem and Washington, with Israel freezing tax transfers to the Palestinians. In the US, congressional officials have said they will consider slashing aid payments to Ramallah and the Obama administration has said it is weighing defunding the Palestinian Authority.

Turning to domestic matters, Netanyahu deflected blame for the rise in housing prices. He blamed this on the 2006-2009 government of prime minister Ehud Olmert, and, the shortcomings of Yesh Atid party head Yair Lapid, who served as finance minister under Netanyahu until November.

“Why did the price of apartments go up? Because the Olmert government took an outrageous decision to stop building and planning in the central region. We started to deal with that two years ago, but the treatment was stopped because we got a trendy party that was bigger than our party,” he said referring to Yesh Atid. “Lapid stopped the decision to evacuate IDF bases from the areas in demand [for living space] and I needed to fire him and make the decision to continue. ”

When challenged that, he was the one who appointed Lapid to be finance minister, Netanyahu declared that the decision was not a willing one.

“I think his appointment was forced on us to a large amount,” he said.

After the interview aired, Yesh Atid shot back in a statement that accused Netanyahu of damaging the country during his time in office.

“Netanyahu is in a state of panic because in six years he has led Israel to a dramatic increase in the cost of living and an 80% increase in the cost of housing,” the statement read. “He is leaving behind him a less secure country with damaged relationships in the international community including with our best strategic ally, the United States.”

Yet, despite the criticism, the prime minister did not rule out welcoming Lapid, and his party, as future coalition partners.

“I don’t discount or ban,” he said, echoing a similar statement Lapid made about Netanyahu a day earlier.

Netanyahu also said he intended to keep taxes at their current levels if reelected.

Netanyahu denied that he had promised national-religious Jewish Home party leader and Economy Minister Naftali Bennett the position of defense minister.

“We don’t have an agreement, I haven’t promised anything,” he said and praised current Defense Minister Moshe Ya’alon for his performance.

“I think we have a exceptional defense minister,” he said.