Mr Obama will hold separate talks with Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas, before a joint meeting.

Efforts to restart the peace process have so far been blocked by disagreements over Israeli settlements.

A senior US official told the BBC that there was no expectation of an announcement after Tuesday’s meetings.

He said the meetings are “clear sign of the President’s personal commitment to this issue.”

But he added that it was critical to put the discussions “in context”.

“Nine months ago there was a war in Gaza,” he said. “The Israeli government has only existed for five months.

“And now these three leaders are going to sit down in the same room and continue to narrow the gaps.”

Mr Netenyahu’s office issued a statement welcoming the invitation to talks and saying they would be held “without preconditions”, Reuters news agency reported.

‘Deep commitment’

The announcement of the meetings, which will take place on the sidelines of the UN General Assembly in New York, came after US envoy George Mitchell’s latest round of shuttle diplomacy ended without agreement.

The White House said the meetings next week would continue efforts by Mr Obama, Mr Mitchell and Secretary of State Hillary Clinton “to lay the groundwork for the relaunch of negotiations”.

The road is now blocked Mahmoud Abbas Palestinian president

Mr Mitchell said Mr Obama’s desire to personally engage at this juncture showed his “deep commitment to comprehensive peace”.

The US envoy held a series of meetings with Mr Netanyahu last week in a fresh attempt at getting a deal on Jewish settlement activity.

He also went to the West Bank to talk to Mr Abbas.

Mr Mitchell was hoping for a consensus before all sides attend the UN General Assembly, but he returned to the US without reaching any agreement.

Mr Abbas and the US administration have been demanding a complete freeze on Israeli construction activity.

Mr Netanyahu had previously offered a temporary freeze for several months, but not in East Jerusalem or in cases where homes have already been approved.

He noted this week that there had been a slowdown in settlement construction, but that work would continue on 2,400 units currently being built.

‘New conditions’

On Saturday, both sides were reported as blaming each other for the lack of any agreement to resume the peace process following Mr Mitchell’s visit.

Israeli foreign ministry spokesman Yossi Levi said the Palestinian Authority was “preventing the resumption of the peace process by making conditions that it has not made in the past”, AFP news agency said.

It was not reported which conditions he was referring to.

But Mr Abbas said Israel was to blame for not agreeing to a total freeze in settlement building.

“The road is now blocked,” he told journalists in Cairo.

“There is no more work [for Mr Mitchell] with the Western or Palestinian sides because we are complying with all our duties.

“The focus has to be on the Israeli side.”

By HELENE COOPER

Published: May 28, 2009

WASHINGTON — President Obama called on Israelis and Palestinians on Thursday to move swiftly toward peace talks, as his administration embarked on its first public dispute with Israel.

Speaking to reporters at the White House after talks with the Palestinian president, Mahmoud Abbas, Mr. Obama said that the absence of peace between Israelis and Palestinians was clogging up other critical issues in the Middle East.

“Time is of the essence,” Mr. Obama said. “We can’t continue with the drift and the increased fear on both sides, the sense of hopelessness that we’ve seen for too many years now. We need to get this thing back on track.”

Mr. Obama reiterated his call for a halt to Israeli settlements in the West Bank, and said he expected a response soon from Prime Minister Benjamin Netanyahu of Israel.

Mr. Obama’s words echoed — albeit less bluntly — Secretary of State Hillary Rodham Clinton’s brusque call on Wednesday for a complete freeze of construction in settlements on the West Bank. In expansive language that left no wiggle room, Mrs. Clinton said that Mr. Obama “wants to see a stop to settlements — not some settlements, not outposts, not natural growth exceptions.”

Her comments took Israeli officials by surprise.

Mr. Obama said something similar last week during private talks with Mr. Netanyahu at the White House, and Mr. Netanyahu responded that he could crack down on outposts, but not on the natural growth of settlements, according to American and Israeli officials.

The administration then took the quarrel public, laying down the marker that allowing natural growth would not satisfy the United States and that administration officials would not limit themselves to the diplo-speak of the past that simply called settlement expansion “unhelpful.” The decision left the two allies hurtling toward their first public fight.

On Thursday, Mr. Netanyahu’s spokesman, Mark Regev, said that “normal life” would be allowed in settlements in the occupied West Bank, using the phrase that Israel often uses to describe continued construction to accommodate population growth.

Privately, Israeli officials said they were upset by the administration’s hard line. Israel’s defense minister, Ehud Barak, is scheduled to visit Washington next week with Israel’s response to Mr. Obama’s call for a settlement freeze, American officials said.

Advisers to the Palestinian Authority said that Mr. Abbas’s meetings in Washington with administration officials — including Mrs. Clinton and the national security adviser, Gen. James L. Jones — had been more amicable than the Israelis’ meetings were. That could reflect the view in Washington that Mr. Abbas does not have the political weight at the moment to push through anything on the Palestinian side.

Part of the reason administration officials are pushing the Israelis on settlements is that they think that stance will bolster Mr. Abbas, who has an increasingly fractured Palestinian population. Mr. Obama congratulated Mr. Abbas for adhering to the West’s argument that he should not form a national unity government with the militant Islamist organization Hamas until Hamas forswears violence and recognizes Israel’s right to exist.

Several American presidents, from Ronald Reagan to George W. Bush, have called on Israelis to halt settlement activity, to no avail. The question now, Middle East experts said, is how far Mr. Obama is willing to go to make that happen.

“Hillary Clinton’s statement was notable because the language was stronger than we’ve heard in years,” said Ali Abunimah, the co-founder of ElectronicIntifada, a Web site that analyzes the Israeli-Palestinian conflict. “And clearer than we’ve heard in years. But the burden of proof is still on them. If it’s just going to be strong statements, that’s not enough.”

Administration officials have not said whether there is an “or else” attached to their demand for a settlement freeze.

Mr. Obama said Thursday that it was not yet time for that. “In my conversations with Prime Minister Netanyahu, I was very clear of the need to stop settlements, stop the building of outposts,” he said. “I think we don’t have a moment to lose, but I don’t make decisions based on a conversation we just had last week.”

Administration officials are trying to elicit support for Mr. Obama’s stance from pro-Israel lawmakers in Congress, including Senator John Kerry, the Democrat of Massachusetts who is chairman of the Foreign Relations Committee.

If they can expand that support to include House members like Gary Ackerman and Nita M. Lowey, both Democrats of New York, then Mr. Netanyahu could find himself on the defensive at home for allowing Israel’s relationship with its most powerful backer, the United States, to sour, foreign policy experts said.

“This approach is predicated on the assumption that an Israeli prime minister needs a tough American president to justify tough decisions to an Israeli public,” said Martin Indyk, director of the Saban Center for Middle East Policy and a former United States ambassador to Israel. “People in the American Jewish community and in Israel are sick of settlement activity. The whole zeitgeist has changed.”

Published: May 28, 2009

GAZA — Dozens of families still live in tents amid collapsed buildings and rusting pipes. With construction materials barred, a few are building mud-brick homes. Everything but food and medicine has to be smuggled through desert tunnels from Egypt. Among the items that people seek is an addictive pain reliever used to fight depression. Four months after Israel waged a war here to stop Hamas rocket fire and two years after Hamas took full control of this coastal strip, Gaza is like an island adrift. Squeezed from without by an Israeli and Egyptian boycott and from within by their Islamist rulers, the 1.5 million people here are cut off from any productivity or hope. “Right after the war, everybody came — journalists, foreign governments and charities promising to help,” said Hashem Dardona, 47, who is unemployed. “Now, nobody comes.” But with the Obama administration pressing Israel to allow in reconstruction materials, and with attention increasingly focused on internal Palestinian divisions, Gaza will soon be back at the center of Middle East peace negotiations. The Palestinian president, Mahmoud Abbas, met with President Obama on Thursday in Washington. For many Israelis, Gaza is a symbol of all that is wrong with Palestinian sovereignty, which they view increasingly as an opportunity for anti-Israeli forces, notably Iran, to get within rocket range. That leaves Gaza suspended in a state of misery that defies easy categorization. It is, of course, crowded and poor, but it is better off than nearly all of Africa as well as parts of Asia. There is no acute malnutrition, and infant mortality rates compare with those in Egypt and Jordan, according to Mahmoud Daher of the World Health Organization here. This is because although Israel and Egypt have shut the borders for the past three years in an effort to squeeze Hamas, Israel rations aid daily, allowing in about 100 trucks of food and medicine. Military officers in Tel Aviv count the calories to avoid a disaster. And the United Nations agency for Palestinian refugees runs schools and medical clinics that are clean and efficient. But there are many levels of deprivation short of catastrophe, and Gaza inhabits most of them. It has almost nothing of a functioning economy apart from basic commerce and farming. Education has declined terribly; medical care is declining. There are tens of thousands of educated and ambitious people here, teachers, engineers, translators, business managers, who have nothing to do but grow frustrated. They cannot practice their professions and they cannot leave. They collect welfare and smoke in cafes. A United Nations survey shows a spike in domestic violence. Some people say they have started to take a small capsule known as Tramal, the commercial name for an opiate-like painkiller that increases sexual desire and a sense of control. Hamas has recently warned of imprisonment for those who traffic in and take the drug. Yet the pills arrive, along with clothing, furniture and cigarettes, through the hundreds of tunnels punched into the desert at the southern border town of Rafah by rough-edged entrepreneurs who pay the Hamas authorities a tax on the goods. Similar tunnels also serve as conduits for arms. Israel periodically bombs those in hopes of weakening Hamas, which says it will never recognize Israel and will reserve the right to use violence against it until it leaves all the land it won in the 1967 war. After that, there would be a 10-year truce while the next steps were contemplated, although the Hamas charter calls for the destruction of Israel in any borders. Israel began the siege after Hamas won Palestinian legislative elections in 2006. It was tightened after Hamas pushed the Palestinian Authority out of Gaza in June 2007. Iranian backing for Hamas has added to Israel’s conviction that the siege is the right path. The aim is to keep Gaza at subsistence and offer a contrast with the West Bank, which in theory benefits from foreign aid and economic and political development. Hamas supporters will then realize their mistake. The plan has not gone well, however, partly because the West Bank under Israeli occupation remains no one’s idea of paradise and partly because Hamas seems more in control here every year, with cleaner streets and lower crime, although its popularity is hard to gauge. “Hamas is learning from its mistakes and getting stronger and stronger,” said Sharhabeel al-Zaeem, a prominent lawyer here. He and others have been urging international officials to get construction materials and other goods into Gaza through the closed crossings. They argue that the current system serves only Hamas, since it taxes the illicit tunnel goods and limited currency exchanges and is not blamed by the people for the outside siege. If glass and cement were allowed in through the crossings with Israel, they say, Hamas would not get the credit and the Palestinian Authority could collect the taxes. “The people of Gaza are depressed, and depressed people turn to myth and fantasy, meaning religion and drugs,” said Jawdat Khoudary, a building contractor. “This kind of a prison feeds extremism. Let people see out to see a different version of reality.” Israeli officials remain skeptical of opening the borders. Many believe that their war served as deterrence and note the drastic reduction in rocket fire as evidence. They fear that steel or cement will be siphoned off by Hamas for arms. But they are feeling pressure from the Americans and United Nations, and they are discussing a pilot project. Meanwhile, Gaza feels more and more like a Hamas state and less linked to the West Bank. Men are increasingly bearded, women are more covered. Hamas is the main employer. Schools and courts, once run by the Fatah-dominated Palestinian Authority, are all Hamas. The government is collecting information on companies and nonprofit groups and seeking control over them. Many here are especially worried about the young. At a program aimed at helping those traumatized by the January war, teenagers are offered colored markers to draw anything they like, says Farah Abu Qasem, 20, a student of English translation who volunteers at the program. “They seem only to choose black and to draw things like tanks,” she said. “And when we ask them to draw something that represents the future, they leave the paper blank.”

Taghreed El-Khodary contributed reporting.

By ISABEL KERSHNER

Published: May 27, 2009

JERUSALEM — The Israeli government wants to reach understandings with the Obama administration that would allow some new construction in West Bank settlements, an Israeli official said Wednesday, despite vocal American and Palestinian opposition. The Palestinian president, Mahmoud Abbas, was expected to focus on the issue of settlement expansion in his meeting with President Obama in their meeting scheduled for Thursday in Washington. Mr. Abbas and other Palestinian leaders have stated repeatedly that they see no point in resuming stalled peace negotiations without an absolute settlement freeze. President Barack Obama and other senior American officials have called on the government of Benjamin Netanyahu, the leader of the right-wing Likud Party who came into office almost two months ago, to halt all settlement activity. Dan Meridor, the Israeli minister of intelligence, and other senior Netanyahu aides returned on Wednesday from meetings in Europe with President Obama’s Middle East envoy, George Mitchell, and other American officials. The purpose was to continue discussing issues raised in last week’s Netanyahu-Obama meeting, including that Mr. Obama’s objections to settlement expansion. Almost 300,000 Israelis now live in settlements in the West Bank, excluding East Jerusalem, among a Palestinian population of some 2.5 million. Much of the world considers the 120 or so settlements a violation of international law. Mr. Netanyahu says that his government will not build any new settlements and will take down a number of outposts erected in recent years by settlers without proper government authorization. But he insists that his government will allow building within existing settlements to accommodate what he termed “natural growth,” essentially continuing the policy of the last few Israeli governments. Israel says it reached understandings with the Bush administration — some formal, some informal and some tacit — on building within settlements. For example, construction was limited in small, outlying settlements but more tolerated in large ones in areas that Israel intends to keep under any deal with the Palestinians. “We want to work to reach understandings with the new administration” that are “fair” and “workable,” said the Israeli official. He was speaking on condition of anonymity because the issue was still under discussion. The Obama administration is seeking a settlement freeze in the hope of improving the environment for peace-making, encouraging gestures toward normalizing ties with Israel from Arab governments, and buttressing a coalition of countries opposed to Iran developing nuclear weapons. But there is a consensus within the Israeli government that the ever-growing settler population must be accommodated. Mark Regev, a spokesman for Mr. Netanyahu, said the final status of the existing settlements would be determined in negotiations with the Palestinians. “In the interim, normal life should be allowed to continue in those communities,” Mr. Regev said. In an interview with Army Radio on Monday, Ehud Barak, the defense minister and leader of the center-left Labor Party, gave a hypothetical example of a family of four that originally moved into a two-room home in a settlement. “Now there are six children,” he said. “Should they be allowed to build another room or not?” He added, “Ninety-five percent of people will tell you it cannot be that someone in the world honestly thinks an agreement with the Palestinians will stand or fall over this.” In an effort to show goodwill, Mr. Netanyahu and Mr. Barak have been underscoring their willingness to take down 22 small outposts that are illegal under Israeli law, and which were supposed to have been removed under the 2003 American-backed peace plan known as the road map. That plan specified that Israel should halt “all settlement activity (including natural growth).” Mr. Barak has said he will try to remove the small outposts by agreement with the settlers, and if agreement is not reached, then by force. Settlers have vowed to rebuild any outpost that is removed and to create more. In the early hours of Wednesday morning, the police removed some sheds and a tent from two tiny outposts in the Hebron area. Another small outpost was demolished in the Ramallah region last week, but new shacks have already appeared there. None of the three outposts were on the list of 22, but the measures against them prompted furious reactions from the hard right. Many religious Jewish nationalists say it is their right to settle in the biblical heartland of the West Bank, which they refer to as Judea and Samaria. Other Israelis cite security reasons for holding on to the areas captured in the 1967 war. Another point of contention between the Israeli government and the Obama administration is Mr. Netanyahu’s refusal to publicly endorse a two-state solution for the Israeli-Palestinian conflict, a cornerstone of American policy. At a conference on Tuesday in the Israeli Parliament on alternatives to end the conflict, a Likud minister and former army chief of staff, Moshe Ya’alon, said the peace process based on the two-state paradigm had failed and that it was time for new ways of thinking. The conference was organized by a Likud parliamentarian, Tzipi Hotovely.

By ETHAN BRONNER

Published: May 20, 2009

RAMALLAH, West Bank — There is the Central Committee and the Revolutionary Council, the Old Guard and the Young Guard. There are the insiders, the outsiders, the cell leaders, branch chiefs and district heads. And there is the Office of Mobilization and Discipline, also known as the Office of Indoctrination.

Fatah, the core of the Palestinian national movement for five decades, has the organizational transparency of a Soviet republic and was long run like one by its founder, Yasir Arafat. Talk of reform arose after his death five years ago and again when Hamas defeated it in legislative elections in 2006.

But shock after shock has done little to induce change. The movement has been paralyzed by competing personal alliances and a continuing identity crisis, and has not held a congress in 20 years. While the gap between the Fatah-led West Bank and the Hamas-led Gaza is widely recognized, less appreciated is that Fatah itself, which the West trains and helps, is so internally torn that it is scarcely able to negotiate or govern.

On Tuesday, Prime Minister Salam Fayyad announced a new government with greater Fatah representation among the ministers but little change in policy.

“We are on a sinking ship, and the leadership thinks it can save us by plugging a hole,” lamented Qaddoura Fares, a leading Fatah advocate of change and peace with Israel. “We have to wake up and stop lying to ourselves. We call ourselves a democratic movement, but what democratic movement hasn’t met in 20 years?”

If he and others succeed and Fatah reorganizes itself and successfully takes on Hamas in elections planned for 2010 in the West Bank and Gaza, prospects for a deal between Israel and a future state of Palestine could brighten considerably. But polls show that if elections were held now, Hamas would give Fatah a very close race.

“Fatah used to be a movement focused on armed struggle, but now we want to be an economic and social movement with good government that ends corruption and promotes democracy,” said Bassam Walweel, a political activist-turned-businessman who is also playing a role in trying to reshape the group. “We are committed to peace with Israel.”

The Palestine Liberation Organization has long been dominated by Fatah and includes some smaller factions. Hamas was created in the late 1980s and is not part of the P.L.O. But since taking the 2006 elections, it has become the rising force in Palestinian politics, prompting Fatah to think about reform. After a four-day battle in June of 2007, Hamas took over Gaza, and Fatah was left with the West Bank.

In the past year, each of 14 West Bank regions has elected a new Fatah chief, most of whom are college-educated and professionally engaged. They meet weekly and rotate the leadership to avoid power plays. In addition, Fatah has taken a lesson from Hamas, seeking to make an impact at a grass-roots level by opening a 24-hour satellite television station and providing free lunches and book bags for needy schoolchildren.

While most analysts and Fatah activists remain pessimistic that real change will occur soon, the continuing ferment for reform within is unmistakable.

Nearly every day in past weeks, Fatah activists have discussed ways to bring about the long-postponed congress aimed at producing new governing bodies and a fresh set of procedural and policy guidelines. The Palestinian president, Mahmoud Abbas, who is the head of Fatah, has promised activists that he would hold the congress on July 1 in the West Bank. Most predict that the deadline will be missed, but also agree that a congress is needed.

“It is highly unlikely that the congress can be postponed for long,” said Khalil Shikaki, a Ramallah-based political scientist and pollster. “It has to happen this year to prevent the Young Guard from revolting.”

Every element of the congress is a source of division — who attends, as well as when and where it should be held and what should be decided.

The new political activists, from within the West Bank and Gaza, want the number of delegates to run into the thousands, so that the aging leaders can be pushed aside. Many are hoping to elect Marwan Barghouti, who is in an Israeli prison, as the new leader. The membership committee, however, wants only 650 to be invited. Mr. Abbas has said the number should be around 1,500.

To hold the meeting in the West Bank, as Mr. Abbas wants, would be to strengthen the insiders, those in the West Bank and Gaza, as opposed to the outsiders, those living in places like Lebanon and Syria. But a West Bank venue also means that Israel, which controls the borders with the West Bank, would have veto power over which outsiders could come.

This poses a delicate dilemma for Israel. While it might in theory favor a strengthened and renewed Fatah as a future negotiating partner and Palestinian government, such an organization could also be more militant. It would also have to decide what to do about Mr. Barghouti if he were elected.

Many of the younger activists say that the men around Mr. Abbas are mistaken to take armed struggle off the table, especially after Israel’s attack on Gaza in January. At the same time, they say that if a deal were struck, they are the ones who could sell it to the street and make it stick.

“The current leadership doesn’t keep armed struggle as an option,” said Dimitri Y. Diliani, the Fatah spokesman for the Jerusalem area. “For us on the ground, we are in favor of political discourse to pursue national goals. But in case it doesn’t work in a certain time frame we should resort to other options, including armed resistance.”

If the congress were held in Egypt or Jordan, the authorities there could have undue influence over who attended and what was concluded.

The biggest question for Fatah is what exactly it stands for: whether to push for a unity government with Hamas or seek to defeat it; whether to accept compromise with Israel on issues like the Palestinian right of return, the borders of the new state and the status of Jerusalem.

For Israel and the United States, the problem is equally vexing. They have an interest in helping the nationalists to reform and hold their congress. But they also have to decide how much to help the new leaders, some of whom may end up becoming opponents if the peace negotiating process fails.

By ISABEL KERSHNER

Published: May 21, 2009

JERUSALEM — Israeli police and security forces on Thursday dismantled a small Jewish outpost in the West Bank in what many here saw as a gesture by Israel’s prime minister, Benjamin Netanyahu, to President Obama three days after their meeting in Washington.

No arrests were made at the illegal outpost, where at least four families lived in a couple of concrete structures and several temporary shacks. Micky Rosenfeld, a police spokesman, said the timing of the action was not significant. Another small West Bank outpost was removed about two months ago, he said.

But it was the first time Israel’s new right-leaning government had removed a settlement, and settler leaders and others saw it as a political message.

“It seems that this was done in order to throw a bone to the United States president,” Avi Roeh, the chairman of the local settler council, told Israel Radio.

Pressing for a renewed Israeli-Palestinian peace process, the Obama administration has made clear that it expects Israel to carry out a total settlement freeze and remove illegal outposts in the West Bank, according to Israel’s commitments under a 2003 peace plan known as the road map.

The outpost, Maoz Esther, which is in the Ramallah region. Hours after it was dismantled, a resident, Daniel Landesberg, 19, said he had already set about rebuilding his demolished home.

Speaking by telephone, he said the move was “a signal” from Mr. Netanyahu to Mr. Obama that Israel would do whatever he asked.

Israeli government officials say they want to remove the outposts by agreement with the settlers in order to avoid confrontation. Long months of talks under the previous government, however, did not yield tangible results.

Israel’s defense minister, Ehud Barak, met with settler leaders on Wednesday and told them that the illegal outposts were damaging Israel’s international relations and their own cause. He said the outposts would be removed “if not through dialogue, then through swift and aggressive enforcement.”

On Thursday, Mr. Barak said the evacuation of Maoz Esther was “not connected with the Americans or American pressure,” and that it was carried out according to routine orders. More than a hundred outposts are dotted around the West Bank, alongside dozens of established Jewish settlements authorized by Israel but widely considered abroad a violation of international law.

Yariv Oppenheimer of Peace Now, an Israeli advocacy group that opposes Jewish settlement in the West Bank, said that the outpost evacuated on Thursday was not a significant one, and that the action was “more about P.R.” after the Washington meeting. Mr. Oppenheimer added that the same outpost has been evacuated at least twice before.

Rina Castelnuovo contributed reporting from Maoz Esther, West Bank.

Tom Baldwin in Washington

President Obama yesterday embarked on his most daunting diplomatic challenge yet by telling Israel to take “difficult steps” towards peace, allow a Palestinian state and halt settlement expansion on occupied land.

His talks with Binyamin Netanyahu, Israel’s hardline Prime Minister, marked the start of an intensive focus on the Middle East. Mr Obama hopes to re-start a peace process that has stalled under a succession of US presidents.

After more than two hours of discussions at the White House Mr Obama said that it was in the interests of every country, including the US, to “achieve a two-state solution in which Israelis and Palestinians are living side by side in peace and security”.

He added: “I suggested to the Prime Minister that he has an historic opportunity to get a serious movement on this issue during his tenure. That means that all the parties involved have to take seriously obligations that they have previously agreed to.”

Such obligations, he said, had been “outlined in the road map” agreed with the US in 2003 and meant that building work by Jewish settlers on Palestinian land must cease. “We have to make progress on settlements,” Mr Obama said. “Settlements have to be stopped.”

Mr Netanyahu has so far refused to endorse full Palestinian statehood. He has suggested that settlements needed to be allowed to grow naturally, insisting that the priority should be to deal with the “existential threat” to Israel posed by a nuclear Iran.

At the White House he again pointedly sidestepped the issue of Palestinian sovereignty, indicating that he favoured a more limited form of self-government for Palestinians. While promising to resume peace talks immediately he said that any deal depended on the acceptance across the Arab world of Israel’s right to exist.

At their joint press appearance Mr Netanyahu had little to say about Palestinians but a great deal about Tehran’s nuclear ambitions: “We want to move simultaneously and in parallel on two fronts: the front of peace and the front of preventing Iran from acquiring nuclear capability.”

Mr Obama, having admitted in March that Mr Netanyahu’s return to power did not make peacemaking any easier, knows that the Prime Minister has since been rattled by signs that he may adopt a tougher approach towards Israel — while softening his policy on Iran. Two weeks ago CIA director Leon Panetta is said to have met Mr Netanyahu in Jerusalem where he was told Israel was only willing to wait around a year for the US policy of re-engaging Iran to work. There have been regular hints that Israel might consider a military airstrike to stop Tehran getting nuclear capability.

At his meeting with Mr Netanyahu Mr Obama offered Israel reassurance that there was “deepening concern” about Iran and he was keeping open a “range of steps, including much stronger international sanctions” if Tehran fails to respond.

While refusing to set an artificial deadline for any negotiations with Iran about ceasing uranium enrichment, he said: “We’re not going to have talks forever . . . We should have a fairly good sense by the end of the year as to whether they are moving in the right direction.”

The White House talks had been billed as a confrontation between two sharply conflicting approaches to resolving the 60-year conflict between Israel and Palestinians. Mr Netanyahu — a sometimes abrasive figure who on his first visit to the White House in 1996 so infuriated Mr Clinton that the then President vented a stream of profanities once his guest had left — poured on the charm yesterday, praising Mr Obama as a “great leader for America, a great leader for the world and a great friend of Israel”.

For his part Mr Obama expressed confidence that Mr Netanyahu “is going to rise to the occasion”.

The White House emphasised that the meeting should be seen merely as the first stage of what will inevitably be a long and uphill journey towards a lasting settlement. Next week he will hold White House talks with President Mubarak of Egypt, and Mahmoud Abbas, the head of the Palestinian Authority, as he prepares to unveil his peace initiative, possibly in a speech to the Muslim world, on June 4.

After their meeting in the White House Mr Netanyahu told a select group of journalists that he had deliberately ducked the vexed issue of Palestinian statehood. “I did not say two states for two peoples,” he said.

“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,” Mr Netanyahu said.

On the President’s plate

Middle East

Obama holds talks with President Mubarak of Egypt on May 26 and Mahmoud Abbas, the Palestinian President, on May 28. On June 4 Obama addresses the Muslim world from Egypt. He then goes to France and Germany for 65th anniversary of the Normandy landings

Domestic legislation

Reform Bills on healthcare and climate change reach Congress next month. Democrats have majorities in both Houses but the measures will be opposed by fiscal conservatives as Capitol Hill tries to reconcile different versions of a $3.6 trillion Budget, while dividing over Bush-era interrogation techniques

Supreme Court

A battle may be looming over the nomination to replace Justice David Souter. Will it be a woman? An advocate of same-sex marriage? The choice threatens to drag Obama back into the “culture wars” — something that he would prefer to avoid

Peace and prosperity — or war and poverty?

Obama goes to Russia on July 6-8 for talks with President Medvedev on nuclear disarmament, missile defence and Iran. He goes to Italy on July 8-10 for the first G8 summit since the world economy imploded, before a visit to Ghana. The surge of 21,000 US troops into Afghanistan continues through the summer in the run-up to August 20 elections there. Stimulus spending needs to start showing results at home before the year’s end

James Hider in Kiryat Arba

As President Obama was telling Binyamin Netanyahu, the Israeli Prime Minister, this week that all Jewish settlement activity in the West Bank must stop, in the huge settlement of Kiryat Arba on the edge of Hebron, one of the founders of the settler movement was explaining why that will not happen.

Elyakim Haetzni, 82, a German-born former lawyer, detailed how the settlers had run rings around the authorities’ half-hearted attempts to prevent settlement growth, and scoffed at the idea of a freeze.

Settlers and Israel’s anti-occupation peace camp agree on one thing: settlement growth far outstrips normal population increases inside Israel.

“In all these years of the freeze, the growth in population in Judea and Samaria (the West Bank) was two to three times greater than in other parts of the country,” said Mr Haetzni, an articulate elder of Kiryat Arba.

Settlers complain that pressure to prevent their controversial hilltop towns and villages across the West Bank is strangling their communities, preventing people from raising families or expanding their homes.

In Noqdim, near Bethlehem, Michal Kupinsky, who organises cultural events in the settlement where Avigdor Lieberman, the Foreign Minister, lives, said that there was a waiting list of up to 50 families wanting to move in, largely because a road linking it to Jerusalem had been opened up two years ago, after being off-limits to Israelis for security reasons.

Israeli state radio said this week that settlements were expanding across the West Bank and in the Jordan Valley. Yet the Government of Mr Netanyahu, and his centrist predecessor, have claimed to be clamping down on them. “It is both at the same time,” said Mr Haetzni. “If there were no freeze we could have built three or four times more. But it’s true on the other side that there is also no freeze. In Kiryat Arba recently we brought in 20 caravans. There was no response from the authorities. We have places where houses were built illegally. Whether the American satellite has caught it I don’t know.”

What Mr Netanyahu describes as a permissible “natural growth” is, in fact, a long-running cat and mouse game designed to wear down the authorities by a determined group of zealots who believe history is on their side.

Mr Haetzni, who lost relatives in the Holocaust and who was severely wounded fighting Arab armies in 1948, said that the settlers had smuggled the mobile homes into Kiryat Arba in pieces, then assembled them as a new neighbourhood.

“We live in caves, we buy tents,” he said, citing the case of the evacuation of the settler outpost of Homesh in the northern West Bank two years ago as a prime example. “There’s a new movement of return to Homesh” he said.

“Even if [the police] reach the top of the hill the people disperse, they have to chase our people through Arab villages, so they give up. For almost two years there has been this cat and mouse game, and the authorities are fed up and they ran out of money; anything they destroy is built again.”

Mr Haetzni said that sympathisers in the security forces tipped off the Homesh settlers before a raid. Soldiers who fought in Gaza confirmed that combat units once largely made up of kibbutzniks — that formed the backbone of the Jewish state in its early days — were now largely made up of members of the national-religious community, from which the settler movement draws so much support.

Mr Haetzni said that it was a natural process caused by the collapse of the kibbutz movement and the passing of the Zionist torch to the right-wing. He said the army could not be used to evacuate the estimated 250,000 settlers now living in the West Bank.

“It goes against the grain of the country. You can’t take the Zionist state and cut the Zionism out,” he said.

Bronwen Maddox, Chief Foreign Commentator

How tough could President Obama be on Israel if he wanted? And how tough is he likely to be? He could make life expensive and uncomfortable for Binyamin Netanyahu, Israel’s new Prime Minister. That could have repercussions for him, from American public anger and opposition in Congress — as George Bush senior and Jimmy Carter, two presidents who took a tougher line, could warn him.

It seems unlikely that Obama will present Netanyahu with obstacles that he finds very hard or unpleasant to navigate. US political pressure, and Obama’s instinct for conciliation, point that way, as does the tone of this week’s meeting. Obama’s June 4 speech to the Arab world will give the next clue.

Monday’s meeting left four US-Israeli disagreements unresolved. The biggest is Israel’s expansion of West Bank settlements and their roads, checkpoints and barriers, which have left Palestinian territory as disconnected towns — a “bunch of grapes”, as some scornfully call the remaining land. Netanyahu asserts their right to “expand naturally” — a gaping loophole. Second, will Israel accept the US goal of a separate Palestinian state? Obama failed to drag the phrase “two-state solution” out of Netanyahu. Another is Netanyahu’s demand (a newish one) for Palestinians to recognise Israel as a Jewish state as a condition for talks — unsubtle code for dropping the demand of refugees’ right to return. That is often seen as part of a final deal but not the price of entry to talks.

Finally, there is Netanyahu’s insistence that Iran’s nuclear ambitions are Israel’s priority, and that there must be progress on this in parallel with Palestinian talks. Obama gave him an easy ride on this linkage of two problems usually treated as separate, outside the hothouse of Israeli politics.

The most obvious leverage is money. In 1992 President Bush held up $10 billion in loan guarantees that Israel wanted, to build homes for Russian immigrants, to extract a promise that the money would not fund settlements. He lost the 1992 election to Bill Clinton by such a margin that it would be hard to argue that the Israel issue was decisive. But it was unhelpful; he lost a big slice of the Jewish vote in New Jersey and Ohio — and lost both states overall, even though he had previously won them easily.

Nico Hines

Mahmoud Ahmadinejad claimed today that Iran has successfully test fired a new medium-range missile capable of striking as far as Israel or southern Europe.

The Iranian President told a cheering crowd that the military had launched a surface-to-surface missile called Sejil-2 which has a range of about 1,200 miles.

“I was told that the missile is able to go beyond the atmosphere then come back and hit its target. It works on solid fuel,” Mr Ahamdinejad said during a speech in Semnan, northern Iran.

“The defence minister told me today that we launched a Sejil-2 missile, which is a two-stage missile and it has reached the intended target.”

The weapon is an updated version of the Sejil missile, which Iran said it had successfully tested late last year.

The announcement comes two days after President Obama said he would seek deeper international sanctions against Iran if it shunned American attempts to open talks on its controversial nuclear programme.

In the past, Iran has often boasted of developing new weapons systems, only to be met with scepticism from Western defence analysts.

Benjamin Netayahu, the new Israeli Prime Minister, has said that Iran’s missile technology combined with its nuclear programme pose the greatest threat the Jewish state has faced since its creation in 1948.

Iran insists that its nuclear programme is aimed solely at producing electricity for a growing population once its huge reserves of fossil fuels run out. Israel and other states suspect that it is a cover for attempts to create a nuclear weapon.

The UN Security Council has imposed three packages of sanctions against Iran after it ignored successive warnings to suspend uranium enrichment.

But Mr Ahmadinejad insisted once again today that Iran would not give in to any pressure over its nuclear programme. “They (Western governments) said if you don’t stop, we will adopt (sanctions) resolutions… They thought we would retreat but that will not happen,” he said. “I told them you can adopt 100 sets of sanctions, but nothing will change.”

Sejil, the name of the new missile, is a reference to the stones hurled by holy birds sent to defeat an army of elephants in the Koran.