Canadian Prime Minister Stephen Harper on Monday reaffirmed his country's support for Israel, backing a two-state solution for the Israeli-Palestinian conflict.

While delivering a speech to the Knesset, the Israeli parliament, Harper described Israel and Canada as "good friends and natural allies," expressing his wish to strengthen cooperation between the two countries in various fields.

Harper, on a four-day visit to the Jewish state with a large delegation of ministers and business leaders, is the first Canadian prime minister to speak before the Israeli parliament.

He is considered one of Israel's biggest supporters despite international criticism of this country's settlement expansion policy.

Harper said that he supported a future Palestinian state living peacefully alongside Israel.

"We have yet to reach this point, but it must arrive and Israel and Canada would surely welcome the foundation of a Palestinian state," he said.

Whereas Harper expressed confidence that Israel was interested in a two-state solution, Israeli Economy Minister Naftali Bennet had said earlier that day that a Palestinian state would be "destructive to Israel's economy."

Israeli Prime Minister Benjamin Netanyahu also spoke at the occasion, expressing his gratitude for the Canadian leader's support.

"As far as peace is concerned, you realize that true, sustainable peace must be based on mutual recognition and on stern security arrangements on the field," Netanyahu said, hinting at Israel's security demands in the negotiations and its insistence that the Palestinian authority acknowledge Israel as a Jewish state.

After six months of US-brokered peace negotiations, the negotiations are still vague as gaps widen between the Israelis and Palestinians on borders, security, refugees and Jerusalem.

The direct peace talks, having stalled for three years before the United States succeeded in brokering the resumption in July 2013, are scheduled to last for nine months.

However, Israel asked Washington in December to extend the peace negotiations by a year, saying if such an extension was not approved, Israel believed the talks would fail.

Palestinian chief negotiator Saeb Erekat has said that the Palestinians would not accept the time extension proposal, "not even for a single minute."

"Serious peacemakers do not ask for extra time to make peace and stability a reality," he said.

Erekat said on Monday that Israel did not want to negotiate over east Jerusalem, a territory which the Palestinians want as their capital, adding the Israelis also ignored Palestinian refugees' right to return home and continued to expand their settlement buildings in the West Bank.

Erekat also said that he would participate in the World Economic Forum in Davos and will meet with US Secretary of State John Kerry.