As Obama spoke, an Israeli government committee approved the construction of more than 1,500 new homes in Jewish neighborhoods in East Jerusalem, whose 1967 annexation by Israel is not internationally recognized. The plan provoked condemnation from Palestinians and defiance from hard-line Israelis.
“Jerusalem is not up for negotiation and will not be divided,” said Yair Gabbai, a member of Netanyahu’s Likud party who serves on the committee that approved the housing.
Obama’s decision to outline a new White House approach to peace talks appeared to have startled Israelis and Palestinians and even some of the president’s advisers. Indeed, only Obama and three or four aides knew precisely what the president would say before he delivered the speech — parts of which were being altered as it was being put into the teleprompter, administration officials said.
One official, who spoke on the condition of anonymity in order to discuss internal deliberations, described as “opaque” the final debate over what the president would say about the peace process. Deputy Secretary of State James B. Steinberg, who was visiting Jerusalem on Thursday, assured government officials there that “Israel has nothing to worry about in” the speech, the official said.
Obama, adopting a more assertive posture advocated by Secretary of State Hillary Rodham Clinton and a handful of other key advisers, declared bluntly that the “status quo is unsustainable” and the need for progress on a peace settlement “more urgent than ever.”
He then outlined what he said was a base line for a peace deal, including recognition of the pre-1967 boundaries with mutually accepted territory swaps, leading to a “sovereign and contiguous Palestinian state.” Once borders and security issues were settled, Obama said, the two sides could negotiate solutions to more emotionally laden topics, such as the future of Jerusalem and right of Palestinian refugees or their descendants to return to properties in Israel.
In April 2004, President George W. Bush wrote in a letter to then-Israeli Prime Minister Ariel Sharon that negotiations should be “in accordance with U.N. Security Council Resolution 242,” which calls for “the withdrawal of Israeli armed forces from territories occupied in the recent  conflict.”
But in the same letter, Bush also said a full return to 1967 lines was unrealistic “in light of new realities on the ground.” The 2004 declaration angered Palestinian refugees and those living inside the occupied territories, as it effectively rejected the Palestinians’ claim of a right to return to homes inside Israel.
In his response to Obama’s speech, Netanyahu said that during his Friday visit to the White House he “expects to hear a reaffirmation from President Obama of U.S. commitments made to Israel in 2004, which were overwhelmingly supported by both houses of Congress.”
Israeli officials welcomed other parts of Obama’s speech, including his affirmation of the “unshakable” U.S. commitment to Israel’s security and his assertion that a future Palestinian state would be “non-militarized.” They lauded Obama’s warning to Palestinians to drop their bid to seek U.N. General Assembly recognition of a Palestinian state in September, saying that “efforts to delegitimize Israel will end in failure.”
But the provocative parts of the speech will probably add further strain to the already difficult meeting of Obama and Netanyahu on Friday, Israeli Ambassador Michael Oren acknowledged in an interview.
“It adds an edge to it; there’s no question about it,” Oren said. “I think the prime minister will be asking for specificity on a number of issues.”
Among Palestinians, the reaction to parts of Obama’s speech was equally sharp. The Palestinian Authority in Ramallah convened an emergency meeting to discuss the speech, while Hamas, the armed Islamist movement that controls the Gaza strip, denounced the president’s proposals as “a total failure.” Palestinians were angered that Obama rejected their efforts to gain U.N. recognition of statehood and failed to back their demand for a halt to Israeli settlement activity before talks resume.
Nabil Abu Rudeineh, a spokesman for Palestinian Authority President Mahmoud Abbas, declined to comment on the substance of Obama’s remarks.
“All I can say is that the president will convene the Palestinian leadership and we will consult with the Arabs, and within 24 to 48 hours, there will be a reply to everything we have heard from President Obama,” Abu Rudeineh said. “We appreciate the continued efforts of President Obama to help find a solution.”
Greenberg reported from Jerusalem. Staff writers Scott Wilson and Glenn Kessler and staff researcher Julie Tate contributed to this report.