Obama Offers Abbas $400m in Extra Aid for Gaza in Flotilla Aftermath

U.S. President hosts Palestinian leader at White House, calling on Israel to curb settlement building and Palestinians to tackle incitement.

U.S. President Barack Obama on Wednesday called on Israel to work with all parties to find a solution for Gaza and offered the Palestinians $400 million in new aid as Washington sought to contain the fallout from Israel's raid on a Gaza-bound flotilla.

In remarks made as he met Palestinian President Mahmoud Abbas, Obama urged Israel to curb settlement activity and called on the Palestinians to prevent any actions that could incite confrontation.

Palestinian President Mahmoud Abbas and U.S. President Barack Obama

Obama called on Israel to reassess its blockade on the Gaza Strip – but said the best guarantee of a solution was an independent Palestinian state.

"There should be means by which we will be able to stop flow of arms that endanger Israels security," Obama said.

"If we can get a new conceptual framework, we should be able to take what is a tragedy and create an opportunity so the lives of people of Gaza are improved. But in the long run the way to solve this problem is creation of the Palestinian state and ensuring Israels security."

Obama is trying to ensure that heightened Middle East tensions over last week's deadly Israeli commando operation do not derail sputtering U.S.-led peace efforts between Israel and the Palestinians.

On May 31 Israel sparked international condemnation after its forces boarded a Turkish aid ship bound for the Hamas-controlled Gaza Strip and nine pro-Palestinian activists were killed.

As part of th U.S. effort to calm tensions, Obama used the meeting to announce $400 million in extra aid to the Palestinians Authority.

"We think it is important to reaffirm our commitment to improving the day-to-day lives of ordinary Palestinians," Obama said.

The Obama administration has deemed "unsustainable" the three-year-old blockade, which Israel says is needed to stop weapons smuggling and Palestinians call collective punishment.

Expectations for a major breakthrough were low ahead of the meeting. But having pledged to help ease Gaza's plight, Ababs arrived in Washington confident Obama would not send him home empty-handed.

"The president and President Abbas will discuss steps to improve life for the people of Gaza, including U.S. support for specific projects to promote economic development and greater quality of life," a senior Obama administration official said before the summit.