In speech at Cairo University, he said such a solution "is in Israel's interest, Palestine's interest, America's interest, and the world's interest" and promised that he would "personally pursue this outcome."

Speaking of the dislocation and suffering of the Palestinian people over the past 60 years, Obama said "let there be no doubt: the situation for the Palestinian people is intolerable.

"America will not turn our backs on the legitimate Palestinian aspiration for dignity, opportunity and a state of their own," he said, calling on Palestinians to abandon violence.

Obama also pointed to the suffering of the Jewish people over the centuries and to the Holocaust, denial of which he said was "baseless, ignorant and hateful."

"Threatening Israel with destruction -- or repeating vile stereotypes about Jews -- is deeply wrong, and only serves to evoke in the minds of Israelis this most painful of memories while preventing the peace that the the people of this region deserve."

Referring to an ongoing stalemate, Obama said "the only resolution is for the aspirations of both sides to be met through two states, where Israelis and Palestinians each live in peace and security.

And speaking of the peaceful campaign for civil rights carried out by blacks in his own country, the US leader said "Palestinians must abandon violence. Resistance through violence and killing is wrong and does not succeed.

"Violence is a dead end. It is a sign of neither courage nor power to shoot rockets at sleeping children, or to blow up old women on a bus. That is not how moral authority is claimed; that is how it is surrendered."

Obama urged Palestinians to "focus on what they can build," addressing himself to the moderate Palestinian Authority of president Mahmud Abbas and to its Islamist rival, Hamas.

"The Palestinian Authority must develop its capacity to govern, with institutions that serve the needs of its people," said.

Hamas "does have support among some Palestinians," he said, but added that "they also have responsibilities."

Speaking to a group that Israel and the West consider a terrorist organisation, he reiterated what is required for engagement with it.

"To play a role in fulfilling Palestinian aspirations, and to unify the Palestinian people, Hamas must put an end to violence, recognise past agreements and recognise Israel's right to exist," he said.

Turning to the Jewish state, he insisted that it must accept the rights of the Palestinians to their own state.

"Israelis must acknowledge that just as Israel's right to exist cannot be denied, neither can Palestine's. The United States does not accept the legitimacy of continued Israeli settlements," which he said violate previous agreements, undermine peace efforts and must "stop."

He also said Israel must meet its obligations to "ensure that Palestinians can live, and work, and develope their society," saying the continuing humanitarian crisis in the Gaza Strip and lack of opportunity in the West Bank do not serve Israel's security.

And while saying an Arab initiative offering Israel peace for land was important, he said that was not the end to the responsibility of Arab states.

"The Arab-Israel conflict should no longer be used to distract the people of Arab nations from other problems" but a cause for action to help Palestinians develop, recognise Israel's legitimacy and "choose progress over a self-defeating focus on the past."

"Too many tears have flowed. Too much blood has been shed. All of us have a responsibility to work for the day when the mothers of Israelis and Palestinians can see their children grow up without fear."

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