Mideast peace not easier but necessary: US

President of the United States Barack Obama said Wednesday that Middle East peace efforts were not getting any "easier" with Israel building a government under hardliner Benjamin Netanyahu, but said they were "just as necessary."

Obama also said that he expected "steady progress" in resolving disputes with Iran, which could take its "rightful place" in the world if it embraced peace.

"It is critical for us to advance a two-state solution where Israelis and Palestinians can live side by side in their own states with peace and security," Obama declared at a prime-time press conference. "The status quo is unsustainable," said the president.

Obama had been asked about prospects for peace under Netanyahu, who opposes the creation of a Palestinian state, and likely foreign minister Avigdor Lieberman, whom critics have dubbed a racist because of repeated diatribes against Israeli Arabs.

"It's not easier than it was. But I think it's just as necessary. We don't yet know what the Israeli government is going to look like and we don't yet know what the future shape of Palestinian leadership is going to be," said Obama.

Serious in efforts towards a two-state solution

The U.S. president said his appointment of former senator George Mitchell as his special Middle East peace envoy had signaled "that we are going to be serious from day one in trying to move the parties" towards a two-state solution.

But where predecessor George W. Bush set a target deadline of late 2008 to achieve that vision, Obama was more cautious.

"How effective these negotiations may be, I think we are going to have to wait and see," said Obama, who drew on the example of Northern Ireland peace after decades of sectarian troubles as a beacon of hope for Israelis and Palestinians.

It is critical for us to advance a two-state solution where Israelis and Palestinians can live side by side in their own states with peace and security

Obama

Under an agreement that brought Israel's center-left Labour party into the fold of a Netanyahu government, the premier-designate would commit "to reach a comprehensive regional peace agreement" and respect previous international agreements signed by Israel -- an apparent reference to accords reached with the Palestinians.

But the accord does not commit the cabinet to working towards the creation of a Palestinian state. Netanyahu says the economic situation in the occupied West Bank should be improved before negotiations take place on other issues.

The agreement also states that the government would work against those Jewish settlements in the occupied West Bank that Israeli authorities consider illegal.

Steady progress expected with Iran

In the meantime, Obama said he expected "steady progress" resolving disputes with Iran after he made an unprecedented video appeal to the Islamic republic.

Obama last week urged an end to three decades of animosity in a message for the Iranian New Year Nowruz, marking a sharp break from his predecessor George W. Bush.

"Some people said, 'Well, they did not immediately say that we're eliminating nuclear weapons and stop funding terrorism,'" Obama told the news conference.

Iran could take its rightful place in the world if it renounced terror and embraced peace

Obama

"Well, we didn't expect that. We expect that we're going to make steady progress on this front," he said.

Obama was explaining how he planned to be persistent despite setbacks, saying he would also push ahead with peace efforts in the Middle East. "If you are persistent, then these problems can be dealt with," Obama said.

In a decisive break with Bush, who branded Iran part of an "axis of evil," Obama said in his Nowruz message that Iran could take its "rightful place" in the world if it renounced terror and embraced peace.

Iran responded by welcoming Obama's olive branch but urged him to take concrete steps to repair U.S. "mistakes."