The Cairo-based Arab League(AL) said Monday that conditions set by Israeli Prime Minister Benjamin Netanyahu for a Palestinian state were "disabling" and Netanyahu made "a proposal to be refused."

"Arabs would not make concessions regarding issues of Jerusalem and refugees," AL spokesman Abel-Halim el-Abiad told Xinhua, adding that they would not recognize Israel as a Jewish state.

"I think that no one in the Arab World was surprised by Netanyahu's speech because we know his history and style of evasion," he said.

On the other hand, Egyptian President Hosni Mubarak said on Monday that Netanyahu's speech complicated the situation and throttled peace hopes in the region.

Netanyahu declared on Sunday evening that he was prepared to see the establishment of a Palestinian state, so long as the international community could guarantee it did not have any military capabilities.

"Israel can not agree to a Palestinian state unless it gets the guarantee that it is demilitarized," said the Israeli prime minister who took office in late March, adding that Palestinians must accept Israel as a Jewish state.

"When Palestinians are ready to recognize Israel as a Jewish state, we will be ready for a true final settlement," he said, emphasizing that the Jewish people have been linked to the land of Israel for over 3,000 years and ruling out the option of granting Palestinians refugees the right to settle within Israeli borders.

Mubarak, who attended a ceremony of the army's Special Forces on Monday, said in his address that "the proposal to recognize Israel as a Jewish state further complicates the situation", adding that "the Middle East would be a scene of unrest if there is no comprehensive peace."

He stressed that "the solution to the major problems of the Arab and Islamic worlds is through Jerusalem."

"Netanyahu's call for changing the Arab (Peace) Initiative and dropping the refugees' right to return, would not receive support from Egypt or elsewhere," Mubarak said.

Meanwhile, Egyptian Foreign Ministry said in a statement that Israeli prime minister's view which is "not complete" needs to be "developed."

"Egypt hopes to hear different Israeli proposal which is built on the commitment to the two-state solution," it said.

Furthermore, Jordan on Monday expressed disapproval against Israeli Prime Minister Benjamin Netanyahu's call for the creation of a demilitarized Palestinian state in his Sunday speech.

The ideas presented by Netanyahu did not live up to what was agreed on by the international community as a starting point for achieving a just and comprehensive peace in the region, Nabil Sharif, Jordanian Minister of State for Media Affairs and Communications and government spokesperson, said in a statement.

Meanwhile, Lebanese President Michel Suleiman called for unity among Arab leaders, a day after Netanyahu endorsed, with conditions, a Palestinian state beside Israel for the first time.

"Arab leaders should be more united and preserve the spirit of resistance to face the Israeli stands regarding the peace process and the Palestinian refugee issue," Suleiman said.

He called on the international community to exert more pressure on the Israeli government to accept the Arab Peace Initiative, as he said Israel still has a will of military confrontation which can be proved in its offensives on Lebanon and the Gaza Strip.

On the Palestinian side, Palestinian National Authority (PNA) rejected Netanyahu's conditions for resuming peace negotiations.

"Netanyahu will not find any Palestinian to talk to under the conditions he imposed on the creation of the Palestinian statehood, " said Saeb Erekat, a senior Palestinian negotiator.

He added that Netanyahu's speech was "a slap in the face" of President Barack Obama's plan to settle Israeli-Palestinian conflict.

On June 4, U.S. President Barack Obama delivered a speech from Cairo University in Egypt, where he vowed to find a fair solution to the Israeli-Palestinian conflict. The administration of Obama had urged Netanyahu to accept the two-state solution and freeze the construction of settlements in the West Bank.

Meanwhile, Islamic Hamas movement on Sunday said Netanyahu's speech was "racist and radical."

"This speech shows Netanyahu's racist and radical government and its platform, which aims at eliminating all Palestinian people 's rights," said Fawzi Barhoum, a Hamas spokesman on Sunday.

Further, Palestinian Islamic Jihad movement called on Arab states to withdraw the Arab Peace Initiative in response to Netanyahu's speech.

"The misleading Netanyahu speech should motivate the Arab regimes to cancel their initiative and stop being subjected to compromise," said the less influential group in a press release.

However, United States hailed Netanyahu's speech about the creation of a Palestinian state as "an important step forward."

"The president (Barack Obama) welcomes the important step forward in Prime Minister Netanyahu's speech," White House spokesman Robert Gibbs said in a statement when he commented Netanyahu's two-state speech.

"The president will continue working with all parties -- Israel, the Palestinian Authority, Arab states, and our Quartet partners -- to see that they fulfil their obligations and responsibilities necessary to achieve a two-state solution to the Israeli- Palestinian conflict and a comprehensive regional peace," the White House statement said.

Earlier on Sunday, U.S. special envoy for the Middle East George Mitchell concluded his latest swing through the Middle East in a renewed attempt to push forward the long-stalled peace process.