Peace debate exposes deep rifts in Israeli government JERUSALEM (Reuters) - Israel's coalition government presented a divided front on Palestinian statehood on Tuesday as U.S. Secretary of State John Kerry prepared a new mission to revive long-defunct peace talks. Appearing before a parliamentary committee, Israeli chief peace negotiator Tzipi Livni outlined a vision she said she shared with Prime Minister Benjamin Netanyahu of an end to the decades-old conflict with the Palestinians. "My policy and that of the prime minister is that a solution of two states for two peoples must be achieved," said Livni, who heads a small centrist party in the governing coalition. Far-right members of the government were having none of it, in a rare public clash of ideologies between political allies in Netanyahu's administration since it took office in March. Two states for two peoples might be Netanyahu's position, but it is not the official government position. It is not part of its basic guidelines," Orit Struck of the Bayit Yehudi party said at the Foreign Affairs and Defence committee session. The party's leader, Naftali Bennett, repeatedly voiced his opposition to the establishment of a Palestinian state in the occupied West Bank and Gaza Strip, saying it would ultimately be ruled by Muslim militants intent on destroying Israel. Instead, the former Jewish settlement leader said, Israel should annex much of the West Bank, which it captured in the 1967 Middle East war along with East Jerusalem and Gaza. Bennett took his party into Netanyahu's government and has not publicly raised objections to restarting peace talks that collapsed in 2010 over Israeli settlement building - suggesting he did not have to because they stood no chance of success. "It is our land," Struck said of the West Bank, claiming an area many Israelis call by its Biblical name, Judea and Samaria. "It is our land but the question is whether (Israel) stays our state or not," Livni replied, in a nod to what some advocates of a land-for-peace accord fear would be the loss of Israel's Jewish majority if it holds on to the West Bank. Such divisions within the coalition herald political trouble for Netanyahu should U.S. peace efforts make progress. The leader of Israel's main opposition Labour Party has already pledged to support him to offset any defections by hardliners if he clinches a deal with the Palestinians. Netanyahu has voiced support for establishing a Palestinian state next to Israel under a future peace deal, but has said it must be demilitarized and that there can be no Israeli return to pre-1967 war lines, which he has called indefensible. In addition, he has demanded that Palestinians recognize Israel as a Jewish state, a condition they fear would be tantamount to waiving any right of return of Palestinian refugees, a main issue of the Israeli-Arab conflict. Kerry was due to arrive in Israel on Thursday, on his fourth visit as secretary of state, for further talks with Israeli and Palestinian leaders on getting negotiations under way. Silvan Shalom, Israel's minister for regional cooperation and a member of Netanyahu's right-wing Likud party, said: The idea is to go together to announce the resumption of negotiations without precondition. We are awaiting an answer from the Palestinians. Are they willing or not to resume negotiations? The ball is in their court," Shalom told Reuters. Speaking to a U.N. committee in New York on Monday, the top Palestinian negotiator, Saeb Erekat, said: "Make no mistake, we are exerting every possible effort in order to see that Mr. Kerry succeeds." Kerry telephoned Netanyahu last week to voice U.S. concern at Israel's plan to declare legal four unauthorised West Bank settler outposts, a U.S. official said in Muscat on Tuesday. The official, who spoke on condition of anonymity, gave no details about the call, triggered by a court document in which Israel said it had taken steps in recent weeks to retroactively authorize the four outposts built without official permission. Most of the world deems all Israeli settlements in the West Bank as illegal. Israel disputes this and distinguishes between about 120 government-authorized settlements and dozens of outposts built by settlers without official sanction. Additional reporting by Arshad Mohammed in Muscat; Editing by Alistair Lyon