President Joe Biden and Israeli Prime Minister Benjamin Netanyahu offered an upbeat outlook of U.S.-Israel relations in their meeting in New York on Wednesday, even as tensions over the Israeli government’s judicial reform plan simmered.

The meeting was the first between the leaders since Netanyahu returned to office in December, with Biden making clear that he was holding out because of his disapproval of both the Israeli government’s judicial overhaul plans and extremists in Netanyahu’s coalition. The fact that they met in a hotel in New York and not in the White House was a disappointment to the Israeli prime minister and his allies. 

Yet Biden dangled a long-coveted White House visit before Netanyahu, saying: “I hope we will see each other in Washington by the end of the year.”

The leaders met one-on-one for close to an hour. Asked about the apparent thawing of Biden-Netanyahu relations, a senior Israeli diplomatic source took issue with the premise, saying ties were always good because of their “deep personal relations,” adding that they “talk like two old friends.” 

Both leaders emphasized in their opening statements Biden’s recent announcement at the G20 of a rail and infrastructure link from South Asia to Europe via the Middle East, as well as the prospects of Saudi-Israel normalization.

The project will “make Israel a very important hub on a highway to unprecedented prosperity,” Netanyahu said.

The economic corridor will help build a “more stable, more prosperous Middle East,” and Israel and Saudi Arabia working together on it is “a big deal,” Biden said, despite an arrangement in which the two countries are not in direct contact on the matter.

“I suffer from an oxymoron, Irish optimism,” Biden quipped. “If you and I 10 years ago were talking about normalization with Saudi Arabia, I think we’d look at each other like, ‘Who’s been drinking what?’”

“A good Irish whiskey,” Netanyahu interjected.

The Israeli prime minister said he was confident that Biden can “forge a historic peace between Israel and Saudi Arabia,” and mentioned a demand that Washington and Riyadh have been making in relation to normalization talks — tangible steps to help the Palestinians.

“I think such a peace [between Israel and Saudi Arabia] would go a long way for us to advance the end of the Arab-Israeli conflict, achieve reconciliation between the Islamic world and the Jewish state and advance a genuine peace between Israel and the Palestinians,” Netanyahu said.

The prime minister’s view is that “the Palestinians have to be part of the [normalization talks] but they should not have a veto on the process,” the senior diplomatic source in his delegation said. 

Despite members of his coalition taking a hard line against any concessions to the Palestinians, not only in matters related to the West Bank and east Jerusalem but also regarding funding to the Palestinian Authority, the source said. Netanyahu believes that he will be able to reach an agreement with the Saudis without breaking up his governing coalition, and that he will be able to convince them that he will only agree to gestures to the Palestinians that will protect Israel’s vital security interests. 

Netanyahu “will never compromise on Israel’s security,” the source said.

Netanyahu and Biden delved into the details of normalization, and their positions on a Saudi civilian uranium enrichment program “completely overlap,” the senior diplomatic source said — while not detailing what those positions are.

Discussions of a defense pact between the U.S. and  Israel are “part of the overall package that we’re considering,” the source said.

Even with the efforts to keep up a convivial atmosphere in public and the positive trend towards Saudi normalization discussed in private, tensions over changes in Israel’s judiciary were evident. While a few hundred protesters gathered near Biden’s hotel, they could not be heard inside.

“We’re going to discuss some of the hard issues, that is upholding democratic values that lie at the heart of our partnership, including the checks and balances in our systems and preserving the path to a negotiated two-state solution, and ensuring that Iran never, never acquires a nuclear weapon,” Biden said.

Netanyahu, for his part, said that while “we live in uncertain times, rapidly changing times, I want to reassert here before you, Mr. President, that one thing is certain, and one thing will never change, and that is Israel’s commitment to democracy. We will continue to uphold the values that both our proud democracies cherish.”

In the meeting itself, however, the senior diplomatic source said the judicial reform issue took up very little time. Biden asked Netanyahu about it, and Netanyahu responded with the same statements he has made publicly: that he will try to reach agreements with the opposition, and if that fails, find a solution popular with the public that would include some changes to the Judicial Selection Committee.

Biden put a positive spin on the matter: “Even where we have some differences, my commitment to Israel, you know, is ironclad. I think without Israel, there’s not a Jew in the world who is secure. Israel is essential.”