Israeli PM nominates Donald Trump for Nobel Peace Prize - as Gaza ceasefire talks continue
Benjamin Netanyahu made the announcement as he attended a dinner at the White House, and the US president appeared pleased by the gesture.
Speaking to reporters, Mr Netanyahu said the US and Israel are working with other countries who would give Palestinians "a better future" - and indicated those in Gaza could move elsewhere.
"If people want to stay, they can stay, but if they want to leave, they should be able to leave," he added.
Indirect negotiations with Hamas are currently taking place in the hope of securing a 60-day ceasefire in Gaza, which could lead to the release of Israeli hostages in the territory.
Mr Trump has suggested an agreement could be finalised this week.
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