Obama advocates two-state solution in Middle East

In a major speech Thursday, Obama formally outlined the long standing position of going back to the time when Israel seized the West Bank, Gaza Strip, Golan Heights and Sinai Peninsula, but he also acknowledged the need for modifications due to conditions on the ground.

"The United States believes that negotiations should result in two states, with permanent Palestinian borders with Israel, Jordan, and Egypt, and permanent Israeli borders with Palestine," Obama said in a 45-minute address laying out his vision of a new Middle East and North Africa.

"We believe the borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps, so that secure and recognized borders are established for both states," Obama said.

His position agreed with the Palestinian negotiating stance on border issues in the staggering peace process, now stalled again by disputes over Israel settlements in the West Bank and the role of Hamas - a terrorist group in the eyes of the US and Israel - in the Palestinian leadership.

At the same time, Obama reiterated unwavering US support for Israel's security, and he endorsed major negotiating positions of Prime Minister Benjamin Netanyahu's government, including an incremental handover of security responsibilities by Israel when conditions on the ground allow it.

Obama declared the US commitment to Israel's security "unshakable", and said "every state has the right to self-defence, and Israel must be able to defend itself - by itself - against any threat".

However, "the status quo is unsustainable, and Israel too must act boldly to advance a lasting peace", Obama said, adding that "the dream of a Jewish and democratic state cannot be fulfilled with permanent occupation".

Obama also rejected any Palestinian effort to challenge Israel's right to exist, saying they would "end in failure". He noted an expected push for a symbolic UN General Assembly resolution in September "won't create an independent state".