Obama presses two-state solution in U.S.-Israel talks

By Matt Spetalnick and Jeffrey Heller

WASHINGTON (Reuters) - U.S. President Barack Obama on Monday pressed a two-state solution to the Middle East conflict but failed to win a commitment from Israeli Prime Minister Benjamin Netanyahu to back Palestinian statehood.

In their first White House talks, Obama also urged Netanyahu to freeze Jewish settlement building but sought to reassure Israelis wary about his overtures to Iran that he would not wait indefinitely for diplomatic progress toward curbing Tehran's nuclear ambitions.

The two leaders tried to paper over their differences as Obama waded into the thicket of Middle East diplomacy four months after taking office, but the divisions were hard to ignore between Israel and its superpower ally.

"It is in the interests not only of the Palestinians but also the Israelis, the United States and the international community to achieve a two-state solution," Obama told reporters with Netanyahu sitting beside him.

Netanyahu, who heads a new right-leaning Israeli coalition, reiterated that he supported self-government for the Palestinians but made no mention of a state, a position underscoring a rare rift in U.S.-Israeli relations.

"I did not say two states for two peoples," Netanyahu said later at a solo briefing with reporters.

"We need to deliberate to clarify this. Does it mean a Hamas state? I hope not. So how do I ensure it's not a Hamas state, an entity that threatens Israel security? I think that's a fundamental question," Netanyahu said.

Hamas Islamists, who have rejected Western calls to recognize Israel, renounce violence and accept existing interim peace accords, took control of the Gaza Strip in 2007, leaving Palestinian President Mahmoud Abbas governing essentially only in the West Bank.

NETANYAHU DISAPPOINTS PALESTINIANS

Nabil Abu Rdainah, senior aide to Abbas, lauded Obama's commitment to a two-state solution, the cornerstone of U.S. Mideast policy, but called Netanyahu's words "disappointing."

Obama sees engagement in Israeli-Palestinian peacemaking as crucial to fixing America's image in the Muslim world and drawing moderate Arab states into a united front against Iran.

After two hours of talks, Obama offered no new remedies in the Israeli-Palestinian conflict, which has defied efforts by successive U.S. administrations. He has yet to formulate a detailed Middle East strategy.

There have been signs, however, that Obama hopes to sway Netanyahu with the prospect of normalized ties between Israel and all Muslim countries, a comprehensive deal that would require extraordinary diplomatic work by the United States.

With Israeli leaders mostly skeptical of Obama's efforts to engage Iran diplomatically, Netanyahu stressed Israel's concerns about Tehran's nuclear program. Israel, which has not ruled out military strikes against Iran if diplomacy fails, had urged a deadline for moving to tougher actions.

In response, Obama set a rough timetable for his diplomatic outreach to Iran for the first time. "By the end of the year we should have some sense ... whether we are starting to see serious movement on the part of Iranians," he said.