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By Jeffrey Heller JERUSALEM (Reuters) - Benjamin Netanyahu has turned to a 14-year-old Arab peace plan in trying to project a softer image internationally for a new governing coalition in Israel widely seen as more hardline toward Palestinian statehood. In what some political commentators and opposition politicians called spin but a spokesman for Netanyahu dubbed "an important development", the right-wing prime minister said on Monday the 2002 Saudi peace initiative had "positive elements", although some revisions would have to be made. He drew new attention to Arab countries' past offer of normal relations with Israel, in return for a full withdrawal from occupied territory where Palestinians seek statehood, at a time when he is trying to counter a French push for an international conference on the Israeli-Palestinian conflict. Netanyahu's partial embrace of the Arab plan comes after far-right politician Avigdor Lieberman was sworn in as defense minister in a broadened coalition on Monday, an appointment that has raised concern at home and abroad. Israel fears it could face strong world pressure for concessions towards the Palestinians once foreign ministers, including U.S. Secretary of State John Kerry, convene in Paris on June 3 in preparation for a full conference in the autumn. "The Europeans are gathering ammunition, the danger is real. (Netanyahu) is bracing for all this with a regional initiative that has cost him only words for now," political commentator Ben Caspit, a frequent critic of the Israeli leader, wrote in the Maariv newspaper. The Palestinian Foreign Ministry accused Netanyahu of playing a "public relations game." However, the U.S. State Department, which last week said Israel's new right-wing coalition raised "legitimate questions" about the direction of Israeli policy, reacted positively to the Israeli prime minister's comments. "We welcome them. We welcome their stated support for a two-state solution," State Department spokesman John Kirby told reporters in Washington, referring to a longstanding formula for a Palestinian state co-existing with neighboring Israel. "We continue to call on both sides ... to demonstrate with policies and actions their commitment to the two-state solution and we are ready to support them in any way," he added. Asked why Netanyahu may have chosen to speak in favor of the Arab Peace Initiative now, Kirby replied: "I don't know." Lieberman, who also spoke in English on Monday with an international audience in mind, said he concurred with Netanyahu's comments on the regional peace proposal. But Saudi Foreign Minister Adel al-Jubeir said the kingdom doubted Netanyahu's remarks would soon revive Israel-Palestinian negotiations. "It's a little early for one to assess the seriousness of the Israeli side to begin talks based on the Arab peace initiative," he told a press conference in Riyadh on Tuesday. "When the Israeli prime minister spoke about it, he spoke about some clauses that he considers positive, not about accepting the initiative as the basis of talks." A spokesman for Netanyahu declined to discuss what changes Israel might seek in the initiative, which speaks of a "just solution" for Palestinian refugees but whose terms were softened in 2013 to include possible land swaps between Israel and the Palestinians. Zeev Elkin, a minister in Netanyahu's cabinet, said on Israel Radio that any division of Jerusalem under the plan - Israel captured the eastern part of the city in the 1967 Middle East war - is "certainly not acceptable". Netanyahu has also said Israel would never relinquish the strategic Golan Heights, territory it annexed in 1981 but which the world considers occupied Syrian land. (Additional reporting by Noah Browning in Dubai and by Arshad Mohammed in Washington; Editing by Mark Heinrich and Cynthia Osterman)