WASHINGTON 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.
Obama also said he was not closing off a "range of steps" against Iran, including sanctions, if it continues its nuclear program, which Washington believes is aimed at producing an atomic weapon but Tehran says is for peaceful purposes.
Netanyahu said that it was clear to Obama "that Israel retains the right to defend itself". But the Israeli leader said he hoped the president's diplomatic efforts succeeded.
If Netanyahu remains resistant to talks with the Palestinians on tough issues such as borders and settlements, it could cause friction in U.S.-Israeli relations.
Obama said both Israel and the Palestinians would have to meet obligations under the 2003 Middle East "roadmap," which call on Israel to halt settlement expansion in the occupied West Bank and for the Palestinians to rein in militants.
"Settlements have to be stopped in order for us to move forward," Obama told Netanyahu.
In his briefing to reporters, Netanyahu gave no indication he would do so, citing the need for Palestinians to carry out their road map commitments.
The Palestinians say settlements, which the World Court has deemed illegal, could deny them a viable state.
Despite diverging views, Obama and Netanyahu chatted amiably as reporters filed into the Oval Office, but became more businesslike when they started speaking. It was a contrast to the chumminess President George W. Bush often showed to visiting Israeli leaders.
They had been expected to tread carefully in talks seen as helping set the tone for a U.S.-led peace efforts. With his strategy still in the formative stage, Obama seemed in no position to push Netanyahu too hard for concessions to a Palestinian leadership weakened by internal divisions.
Netanyahu can ill afford the perception at home that he is alienating Israel's chief ally. Neither can he be seen giving up too much if he wants to keep the right-wing core of his coalition intact.
(Additional reporting by David Alexander and Ross Colvin; editing by Chris Wilson and Philip Barbara)