Obama Sees 'Enormous Obstacles' to Middle East Peace

On Tuesday, U.S. responded to reports of new construction in East Jerusalem by rejecting Netanyahu's statement that building doesn't affect the peace process.

The Middle East peace process faces "enormous obstacles" but the United States will do all it can to achieve a "just" outcome in talks between Israelis and Palestinians, U.S. President Barack Obama said on Wednesday.

Speaking during a trip to Indonesia a day after criticizing Israelis and Palestinians for not doing enough to reach a breakthrough, Obama said the pursuit of peace in the region was persistent despite setbacks.

"Israelis and Palestinians restarted direct talks, but enormous obstacles remain," he said.

"But let there be no doubt: we will spare no effort in working for the outcome that is just, and that is in the interest of all the parties involved: two states, Israel and Palestine, living side by side in peace and security."

The President's words of determination follow several contentious exchanges between Prime Minister Benjamin Netanyahu and U.S. officials which began after new building plans for Jewish neighborhoods in East Jerusalem were revealed.

U.S. President Barack Obama - AP - Nov. 10, 2010

On Tuesday, the U.S. rejected Prime Minister Benjamin Netanyahu's statement  that construction in East Jerusalem doesn't affect the peace process.

U.S. State Department spokesman Philip J. Crowley said the statement from Netanyahu's office was unhelpful, and rejected its suggestion there was no link between Israeli construction in East Jerusalem and the peace process.

"There clearly is a link in the sense that it is incumbent on both parties, as we've insisted all along, that they are responsible for creating conditions for a successful negotiation," Crowley said. "To suggest that this kind of announcement would not have an impact on the Palestinian side I think is incorrect."

The statement issued from the Prime Minister's Office emphasized that "Jerusalem isn't a settlement" and that it doesn't "see any connection between the peace process and the building and planning policy in Jerusalem."

The statement came as a reply to President Obama, who said on Tuesday that Israel's plan to build 1,300 new homes in East Jerusalem was "unhelpful" to peace negotiations.

Earlier Tuesday, Obama was asked to comment on news that the Interior Ministry in Israel had announced plans to build in East Jerusalem. Saying that he had not been fully briefed on the matter, the U.S. president explained that activities of this type were not helpful for the peace talks and expressed concern that neither side was making the necessary effort to find a breakthrough that would create the conditions of a secure Israel living in peace with an independent Palestinian state.

Construction in Har Homa - AP

Vowing to continue working toward peace, Obama described the peace process as being in the interest of the international community, of Israel and the Palestinians.

Netanyahu began his visit to the U.S. with a feeling that the Americans consider the Palestinians responsible for the impasse in the talks. However, the announcement of plans for more construction in East Jerusalem reverted the attention in his direction, ahead of interviews scheduled in New York with the U.S. media, and a meeting Wednesday with Secretary of State Hillary Clinton, where it is expected he will hear further criticism of the decision.

European Union High Representative Catherine Ashton said in response to the news of planned construction that she was "extremely concerned by the announcement that Israel plans to go ahead with the construction of 1,300 new housing units in East Jerusalem."

"This plan contradicts the efforts by the international community to resume direct negotiations and the decision should be reversed," she said in a statement.

The announcement of planned construction also impacted a meeting between the prime minister and UN Secretary General Ban Ki-moon, who expressed his concern about the construction in East Jerusalem.