Disagreements for Barack and Bibi

President Obama and Israeli Prime Minister Benjamin Netanyahu expressed a desire to proceed with the Mideast peace process and both praised each other quite a bit before the cameras today.

"He has both youth and wisdom," Obama said of his 59-year-old counterpart.

"You're a great leader," Netanyahu returned the compliment. "A great leader of the United States, a great leader of the world, a great friend to Israel."

"I want to start peace negotiations with the Palestinians immediately," Netanyahu said. "I would like to broaden the circle of peace to include others in the Arab world."

But behind the diplomatic-speak in the Oval Office were clear differences in how to get to that peace, particularly on whether the Palestinians should have a functioning state, and whether the Israelis would have to stop construction of settlements on disputed territories.

"It is, I believe, in the interests not only of the Palestinians but also the Israelis and the United States and the international community to achieve a two-state solution in which Israelis and Palestinians are living side by side in peace and security," President Obama said. "We have seen progress stalled on this front. And I suggested to the prime minister that he has a historic opportunity to get a serious movement on this issue during his tenure."

The words "two-state solution," however, were not released from Netanyahu's lips.

He said that the important matter for him "is less one of terminology but one of substance." If the Palestinian people "recognize Israel as the Jewish state, if they -- if they fight terror, they educate their children for peace and to a better future, then I think we can come to a substantive solution that allows the two peoples to live side by side in security and peace...I think the terminology will take care of itself if we have the substantive understanding."

President Obama recalled that in their private meeting, referring to previous US-led peace negotiations, he told "the prime minister the fact that under the road map, under Annapolis, there is a clear understanding that we have to make progress on settlements; that settlements have to be stopped in order for us to move forward. That's a difficult issue. I recognize that. But it's an important one, and it has to be addressed."

Mr. Obama also said that "the humanitarian situation in Gaza has to be addressed...If the people of Gaza have no hope, if they can't even get clean water at this point, if the border closures are so tight that it is impossible for reconstruction and humanitarian efforts to take place, then that is not going to be a recipe for Israel's long-term security or a constructive peace track to move forward."

"All these things are going to have to come together," President Obama said. "And it's going to be difficult."

Netanyahu made no such concessions on settlements, or mention of humanitarian problems in Gaza, though he acknowledged Israel would have to give some things up.

"The goal has to be an end to conflict," said the man known as "Bibi." "There'll have to be compromises by Israelis and Palestinians alike. We're ready to do our share. We hope the Palestinians will do their share as well. If we resume negotiations, as we plan to do, then I think that the Palestinians will -- will have to recognize Israel as a Jewish state; will have to also enable Israel to have the means to defend itself. If those conditions are met -- Israel's security conditions are met, and there's recognition of Israel's legitimacy -- its permanent legitimacy, then I think we can envision an arrangement where Palestinians and Israelis live side by side in dignity, security and in peace."

President Obama said he'd also told Netanyahu that "Palestinians are going to have to do a better job providing the kinds of security assurances that Israelis would need to achieve a two-state solution" with Palestinian leaders gaining "additional legitimacy and credibility with their own people, and delivering services." He added that "other Arab states have to be more supportive and be bolder in seeking potential normalization with Israel."

Recalling a visit to the Israeli border town of Sderot last Summer , the president said he "saw the evidence of weapons that had been rained down on the heads of innocents in those Israeli cities. And that's unacceptable. So we've got to work with the Egyptians to deal with the smuggling of weapons. And it has to be meaningful, because no prime minister of any country is going to tolerate missiles raining down on their citizens' heads."

Both leaders said they shared the view that Iran must not be able to build nuclear weapons, and President Obama said for the first time that by the end of 2009, he would be able to assess whether his diplomatic outreach to Iran had worked.

"By the end of the year I think we should have some sense as to whether or not these discussions are starting to yield significant benefits," he said, "whether we are starting to see serious movement on the part of the Iranians. If that hasn't taken place, then I think the international community will see that it's not the United States or Israel or other countries that are seeking to isolate or victimize Iran. Rather, it is Iran itself which is isolating itself."

Mr. Obama underlined that "Iran obtaining a nuclear weapon would not only be a threat to Israel and a threat to the United States, but would be profoundly destabilizing in the international community as a whole and could set off a nuclear arms race in the Middle East that would be extraordinarily dangerous for all concerned, including for Iran. We are engaged in a process to reach out to Iran and persuade them that it is not in their interest to pursue a nuclear weapon and that they should change course. But I assured the prime minister that we are not foreclosing a range of steps, including much stronger international sanctions, in assuring that Iran understands that we are serious."

He rejected an Israeli reporter's thesis that his outreach would embolden militants. "It's not clear to me why my outstretched hand would be interpreted as weakness," he said. "The approach that we've been taking, which is no diplomacy, obviously has not worked. Nobody disagrees with that. Hamas and Hezbollah have gotten stronger. Iran has been pursuing its nuclear capabilities undiminished. And so, not talking, that clearly hasn't worked.

Netanyahu said the concern voiced by other Arab states about a nuclear Iran presents opportunities for peace, referring to "perhaps a new understanding in the Arab world that I haven't seen in my lifetime." He said in his "59 years, in the life of the Jewish state, there's never been a time when Arabs and Israelis see a common threat the way we see it today, and also see the need to join together in working towards peace, while simultaneously defending ourselves against this common threat."

President Obama agreed about the significance of "Arab states in the region -- the Jordanians, the Egyptians, the Saudis -- who I think are looking for an opportunity to break this longstanding impasse, but aren't sure how to do it, and share concerns about Iran's potential development of a nuclear weapon."

Both Obama and Netanyahu said there wasn't necessary a policy linkage between the Iranian issue and the Mideast peace process.

"There's not a policy linkage between pursuing simultaneously peace between Israel and the Palestinians and the rest of the Arab world, and trying to deal with removing the threat of a nuclear Iran," Netanyahu said. "There are causal links."

Obama agreed.

"There is no doubt that it is difficult for any Israeli government to -- to negotiate in a situation in which they feel under immediate threat," Obama said. "That's not conducive to negotiations...If there is a linkage between Iran and the Israeli-Palestinian peace process, I personally believe it actually runs the other way. To the extent that we can make peace...between the Palestinians and the Israelis, then I actually think it strengthens our hand in the international community in dealing with the potential Iranian threat."

-- Jake Tapper and Sunlen Miller

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