Israeli Prime Minister Benjamin Netanyahu told visiting Chilean president Sebastian Pinera that "we are prepared to sit down and negotiate peace with the Palestinians."
“But, he added, the Palestinians have found a variety of excuses not to do so."
"Whereas Israel and I have been willing to move on this road, I've not seen the parallel willingness to do the same by the Palestinians. Because they're relying on a Pavlovian reflex of the international community," Netanyahu said.
Earlier, the Chilean president declared: "As we always thought Israel has the right to exist with borders recognized by the international community, so the Palestinians have the right to have their own free and democratic state."
Chile has followed Brazil, Argentina, Bolivia and Ecuador in recognizing a Palestinian state in January. Pinera said this recognition was aimed at helping end the Middle East conflict.
But, unlike its neighbours, Chile did not specifically refer to a Palestinian state within the 1967 borders.
Speaking to reporters in Jerusalem, he said Chile wanted to help the two sides work towards a peace agreement that would see both living within their own states with internationally-recognised borders.
Chile is home to a significant Palestinian community which numbers around 350,000. It also has a Jewish population numbering of some 20,000.