PRAGUE (Reuters) - Israel remains committed to a negotiated settlement with the Palestinians, Prime Minister Benjamin Netanyahu said on Wednesday, despite worries among the Jewish state's European allies over its plans to build more settlements.

"We remain committed to a negotiated settlement between us and our Palestinian neighbors," Netanyahu said during a visit to Prague. "That solution is a two-state solution for two peoples, a peace in which a demilitarized Palestinian state recognize the one and only Jewish state of Israel."

Netanyahu's comments came ahead of a visit to Germany, where he was expected to face a dressing down from Chancellor Angela Merkel for the settlement plans that his government is pursuing following a vote in the United Nations last week granting the Palestinian Authority limited statehood status.

(Reporting by Jason Hovet and Robert Muller; Writing by Michael Winfrey; Editing by Jon Boyle)