By STEVEN LEE MYERS and MARK LANDLER WASHINGTON — Seeking to harness the seismic political change still unfolding in the Arab world, President Obama for the first time on Thursday publicly called for a settlement of the Israeli-Palestinian conflict that would create a non-militarized Palestinian state on the basis of Israel’s borders before 1967.

“At a time when the people of the Middle East and North Africa are casting off the burdens of the past, the drive for a lasting peace that ends the conflict and resolves all claims is more urgent that ever,” he said.
Although Mr. Obama said that “the core issues” dividing Israelis and Palestinians remained to be negotiated, including the searing questions of Jerusalem and the fate of Palestinian refugees, he spoke with striking frustration that efforts to support an agreement had so far failed. “The international community is tired of an endless process that never produces an outcome,” he said.
The outline for an Israeli-Palestinian peace agreement came in what the president called “a moment of opportunity” after six months of political upheaval that has at times left the administration scrambling to keep up. The speech was an attempt to articulate a cohesive American policy to an Arab Spring that took a dark turn as the euphoria of popular revolutions in Tunisia and Egypt gave way to violent crackdowns in Bahrain and Syria, a civil war in Libya and political stalemate in Yemen.
It required a delicate balance, reaffirming support for democratic aspirations in a region where America’s strategic interests have routinely trumped its values. While Mr. Obama pushed for Hosni Mubarak’s exit in Egypt, he has backed up the Bahraini royal family’s effort to cling to power. While he called for the resignation of Col. Muammar el-Qaddafi and supported a bombing campaign against Libya with that ultimate goal, he vacillated as Bashar al-Assad of Syria turned tanks and troops on his people, authorizing sanctions against him only on Wednesday.
Mr. Obama said the events in the region reflected an inexorable desire for democracy that nations — both friend and foe of the United States — could not suppress. He bluntly warned Mr. Assad that Syria would face increasing isolation if he did not respond to those demanding a transition to democracy, though again, he stopped short of explicitly calling for his removal.
“President Assad now has a choice,” Mr. Obama said. “He can lead that transition, or get out of the way.”
He was no less blunt in the case of Bahrain, a close ally that has brutally crackdown on protests there. “The only was forward is for the government and opposition to engage in a dialogue, and you can’t have real dialogue when parts of the peaceful opposition are in jail,” he said in one of the few phrases that drew applause from an audience that included State Department officials, lawmakers, military commanders and Arab diplomats.
Mr. Obama, in his remarks, reaffirmed that the Middle East is a complex place, where different countries demand different responses, though he affirmed that America’s support for democracy should undergird its policies. It was a marked contrast to his landmark speech in Cairo in June 2009, when he addressed himself to the Islamic world as a whole, trying to heal a rift with the United States.
He conceded bluntly that the United States had not been a central actor in the uprisings, but he sought to cast America’s role in the Middle East in a new context now that the war in Iraq is winding down and Osama bin Laden has been killed, in part, a primary goal of the war that began in Afghanistan nearly a decade ago.
Mr. Obama’s aides and speechwriters labored on his remarks until the last hours before he delivered it in the stately Benjamin Franklin Dining Room on the eighth floor of the State Department.
Until the end, for example, his aides debated how Mr. Obama would address the conflict that has fueled Arab anger for decades: the division between Israelis and Palestinians. A senior administration official said that Mr. Obama’s advisers remained deeply divided over whether he should formally endorse Israel’s pre-1967 borders as the starting point for negotiations over a Palestinian state.
That he did so sent a strong signal that the United States expected Israel — as well as the Palestinians — to make concessions to restart peace talks that have been stalled since September.
“Precisely because of our friendship, it is important that we tell the truth,” Mr. Obama said. “The status quo is unsustainable, and Israel, too, must act boldly to advance a lasting peace.”
At the same time, he emphasized that no peace agreement should be allowed to jeopardize Israel’s security, to which he declared the United States had an “unshakable commitment.”
Mr. Obama is to meet Israel’s prime minister, Benjamin Netanyahu, at the White House on Friday against the backdrop of the region’s tumult, which reached Israel itself on Sunday when thousands of Palestinians stormed border crossings from Syria, Lebanon, Gaza and the West Bank. The Arab uprisings have sharpened security concerns in Israel, intensified animus toward it and given momentum to global recognition of a Palestinian state.
Much of the president’s dwelt on the security threats to Israel, and his specific reference to a “nonmilitarized” Palestinian state seemed likely to dismay Palestinians, who have long said that such matters should be decided in negotiations. He also warned Palestinians that their campaign to seek recognition in a vote of the United Nations General Assembly in September would not be constructive.
And he warned that the recent unity agreement between two main Palestinian factions, Fatah and Hamas, raised “profound and legitimate questions from Israel.”
“How can one negotiate with a party that has shown itself unwilling to recognize your right to exist,” he said, referring to Hamas, which the United States has designated as a terrorist organization. “In the weeks and months to come, Palestinian leaders will have to provide a credible answer to that question.”
American and Israeli officials are struggling to balance national security interests against the need to adapt to a transformative movement in the Arab world. Mr. Netanyahu prepared to arrive in Washington with a package that he hoped would shift the burden of restarting the peace process to the Palestinians.
The debate around Mr. Obama’s remarks, which the White House has billed as a major address, is made even more significant since the speech will serve as the beginning of what promises to be several intense days of debate over American policy in the region, its support for Palestinian statehood, and how far Mr. Obama is willing to push Israel and the Palestinians.
Mr. Netanyahu plans to spend four days in Washington, addressing the American Israel Public Affairs Committee, the pro-Israel lobby, on Sunday and a joint session of Congress next week. Mr. Netanyahu, his aides say, is planning to tell Mr. Obama that Israel wants to keep a military presence along the Jordan River and sovereignty over Jerusalem and the settlement blocs — three major stumbling blocks for the Palestinians — but that it would be willing to negotiate away the rest of the West Bank, more territory than Mr. Netanyahu has been willing to specify in the past.