The Jerusalem Post reports that "Netanyahu refused the demands of two coalition partners to insert a clause against a Palestinian state in the coalition agreement, sources close to Netanyahu told The Jerusalem Post....They added that there is no great substantive gap between Netanyahu and the international community regarding the issue....While Netanyahu has not yet uttered the phrase 'two states for two peoples,' ...Netanyahu would make his views clear to US and European leaders. ...[on] a formulation on the nature of a Palestinian state...[that would not] be able to threaten Israel's security."
I believe that Netanyahu's past record demonstrates that he is pragmatic rather than ideological in his approach to territorial concessions. On October 23, 1998, Netanyahu signed the Wye River Memorandum, agreeing to transfer 13% of the territory israel controlled in Judea and Samaria to the Palestinian Authority, as an interim step. He signed this agreement with Arafat, knowing that it could (eventually it did) lead to the collapse of his government. Later, at the height of terror attacks during the Second Intifada, he voted against a 2002 Knesset resolution to abrogate the Oslo Accords.
In 2004, as a cabinet minister in the Sharon government, Netanyahu voted four times in favor of Sharon's plan to disengage unilaterally from Gaza, removing soldiers and settlers, a plan bitterly opposed by the settler movement. He later had differences with Sharon over implementation of the plan, but those objections related to practical implementation, not opposition to territorial concessions as such.
In January 2009, Netanyahu refused to sign a pledge being circulated by a settler organization, to rule out a Palestinian state, though leaders to his right, including Lieberman's Israel Beiteinu, the National Union, and the ultra-orthodox Shas, signed the document.
Netanyahu also has shown a pragmatic view of the Syrian front. In August and September 1998, when he was Prime Minister, Netanyahu authorized businessman Ronald Lauder to conduct secret negotiations with Assad, under the supervision of Netanyahu's defense minister and other close advisers. In these negotiations, Netanyahu agreed to extensive territorial concessions on the Golan Heights. Dennis Ross says he authorized "withdrawal to a commonly agreed border based on the June 4, 1967 lines," but Netanyahu denies agreeing to this line. He says he agreed "to make concessions in the Golan - concessions that were defined as setting the border 'kilometers' from the Sea of Galilee," a line of withdrawal similar to that offered by leaders of Israel's Labor party.