Israeli Prime Minister Benjamin Netanyahu said on Wednesday an ambitious US-backed deal to normalise relations with Saudi Arabia was possible, as he met US President Joe Biden in New York.

“I think that under your leadership, Mr President, we can forge a historic peace between Israel and Saudi Arabia,” Netanyahu told reporters, adding that it could “go a long way” to achieve peace between Israel and the Palestinians.

“Such a peace would go a long way for us to advance the end of the Arab-Israeli conflict, achieve reconciliation between the Islamic world and the Jewish state and advance a genuine peace between Israel and the Palestinians.”

Netanyahu’s statement came after he and Biden — who has been pushing Israel to agree to a coveted peace deal with Saudi Arabia — tried to smooth over months of tensions as they met for the first time on Wednesday since the Israeli PM’s reelection in December.

The two leaders shook hands in front of US and Israeli flags at the start of the meeting, held on the sidelines of the UN General Assembly in New York after Biden withheld an invitation to the White House.

Biden said he would raise “hard issues” with Netanyahu, including upholding democratic values, amid criticism of the hard-right Israeli government’s controversial judicial reforms.

They will also discuss an ambitious plan to normalise relations between Israel and its long-time foe Saudi Arabia.

“Today, we’re going to discuss some of the hard issues, that is, upholding democratic values that lie at the heart of our partnership,” Biden told reporters at the start of the meeting.

The US president extended an olive branch by suggesting a meeting at the White House in the coming months, saying: “I hope we will see each other in Washington by the end of the year.”

Saudi Arabia has been one of the biggest backers of the Palestinian cause and has repeatedly stated that it needed to see a Palestinian state before taking up normalisation with Israel.

Washington has been pressing its traditional ally Riyadh to sign a normalisation deal with Israel, which would be its biggest diplomatic win in the region, following similar agreements with the United Arab Emirates, Bahrain and Morocco, known as the Abraham Accords.

Israel’s hard-right government has played down any prospect of it giving significant ground to the Palestinians as part of a normalisation deal with Saudi Arabia.

A source familiar with the matter said Riyadh wants US support for its civilian nuclear programme in exchange for normalisation with Israel — which, for its part, has voiced misgivings over any such quid-pro-quo.

Visiting Saudi Arabia on June 8, US Secretary of State Antony Blinken said the administration would continue working on normalisation “in the days, weeks and months ahead”.

In January, the kingdom’s top diplomat said Saudi Arabia will not normalise ties with Israel in the absence of a two-state solution with the Palestinians.