MOSCOW, June 15 (RIA Novosti) - A Russian diplomat gave a cautious reaction on Monday to the Israeli premier's speech conceding the possibility of a Palestinian state, saying the conditions he had laid out would not help resolve the conflict.

"This [speech] is undoubtedly a sign of readiness for dialogue, but it does not open up the road to resolving the Israeli-Palestinian problem," a Foreign Ministry official told RIA Novosti, adding the conditions set out by Binyamin Netanyahu were "unacceptable for the Palestinians."

In his speech on Sunday night, Netanyahu said Israel would accept a Palestinian state if it recognizes Israel, has no army, if descendants of refugees ousted in 1948 never return, Jewish outposts remain in place, and Jerusalem could not be its capital.

The half-hour speech, seen as response to President Barack Obama's recent address to the Muslim world and U.S. pressure on Israel to back plans for a Palestinian state, offered no real concessions on Palestinian statehood.

Western powers largely welcomed Netanyahu's speech, but Palestinians reacted furiously, with President Mahmoud Abbas accusing the Israeli premier of destroying the peace process and the radical group Hamas, which controls the Gaza Strip, branding the speech "racist."

The foreign minister of the Czech Republic, which holds the European Union presidency, welcomed the speech on Monday. "In my view, this is a step in the right direction. The acceptance of a Palestinian state was present there," Jan Kohout told reporters.

The White House said in a statement that President Barack Obama "believes this solution can and must ensure both Israel's security and the fulfillment of the Palestinians' legitimate aspirations for a viable state, and he welcomes Prime Minister Netanyahu's endorsement of that goal."