Obama: Netanyahu Understands He Must Take Some Bold Steps

President says U.S.-Israel bond strong; White House spokesman: Jerusalem to be discussed in final-status talks.

U.S. President Barack Obama has said he thinks Prime Minister Benjamin Netanyahu understands that he will have to "take some bold steps" when it comes to advancing the Israeli-Palestinian peace process, in an interview with MSNBC on Tuesday.

"I think Prime Minister Netanyahu intellectually understands that he has got to take some bold steps. I think politically he feels it. But it's not just on the Israeli side. I've been very clear that the Palestinians have to take steps," Obama said.

The U.S. president also said that the recent tension between his administration and the Israeli government is merely a "disagreement among friends" and emphasized the strength of the bond between the United States and Israel.

"I think the underlying relationship is solid as a rock. So my commitment, my personal commitment, to Israel's security is unwavering, and I think that there is broad bipartisan consensus on that. This is a disagreement among friends about how to move forward," the U.S. president said.

Meanwhile on Tuesday, White House spokesman Robert Gibbs said that the issue of Jerusalem will be discussed in final-status talks.

"Our view on this, as, again, the view of many administrations prior to ours, are that the issues around Jerusalem are important, and they're final-status issues," said Gibbs.

"We think that coming back to the table, developing the type of confidence and trust that both sides need in these proximity talks, is important to building a process to getting to those final-status issues," he added.

Gibbs also stressed that the relationship between Israel and the United States is still strong.

"Well, between the two countries, as I've said here countless times, there is an unbreakable bond between these two countries. The United States has long been dedicated to the security of an important ally. And that doesn't - that hasn't in any way changed. As a result of having a mature bilateral relationship, there are going to be things that this administration and countless previous administrations have disagreed with this Israeli government as they have with countless previous Israeli governments," the White House spokesman said.

"I think as the president, though, discussed in his interview, that it is important for both sides to take the steps necessary to find a way to come back to these proximity talks. That we are at an important moment and that either side walking away, both sides walking away, does not further the important cause that has to be undertaken to see Middle East peace," he added.

U.S. official: No plans to withhold veto on a Jerusalem UN resolution

Earlier on Tuesday, a U.S. State Department official has denied an earlier report saying the United States will consider abstaining if the United Nations votes on East Jerusalem.

The BBC reported on Sunday that the United States would "seriously consider abstaining" should the United Nations Security Council pass a resolution condemning Israel's housing construction in East Jerusalem.

That message was passed during a meeting between a senior U.S. official and Qatari Foreign Minister Hamad Bin Jasim Al Thani, a diplomatic source told the BBC.

Replying to the BBC report on Tuesday, the U.S. official said that "there is no such initiative before the Council, and we are not pursuing or encouraging any such action."

The BBC previously reported that Sheikh Hamad reportedly asked a senior official from the Obama administration whether the U.S. would promise not to veto a Security Council resolution condemning Israel's settlement activity in East Jerusalem.

The U.S. official reportedly told Hamad in response that the current U.S. position was that it would "seriously consider abstention", according to the BBC.

On Tuesday, the State Department official spoke on behalf of the Obama administration and urged the advancement of the peace process.

"The United States believes that the best way forward lies in direct negotiations between the parties leading to a comprehensive peace agreement including the creation of a Palestinian state living side by side with Israel in peace and security," the official said.

"We continue to urge the Israelis and Palestinians to move forward with proximity talks, ultimately leading to direct negotiations."

"We continue to ask both parties to refrain from taking provocative and unilateral actions that undermine trust and efforts to resume negotiations that will bring an end to the conflict and result in a two-state solution," he added.

Tensions between Israel and the U.S. flared earlier this month when Jerusalem announced its approval of 1,600 new housing units in East Jerusalem, during U.S. Vice President Joe Biden's visit to the region.

The U.S. termed the timing of the announcement an "insult," and both sides have declared that the incident would not harm the close relations.

Netanyahu last year declared a temporary 10-month settlement halt in the West Bank, but would not include East Jerusalem in that freeze. Netanyahu and members of his coalition have repeatedly declared that construction in Jerusalem would continue.