Obama praises 'real progress' after talks with Israel leader

Mr Obama had praise for his guest, hailing as "real progress" Israel's recent decision to ease its three-year blockade of the Palestinian-controlled Gaza Strip. He also said he believed Mr Netanyahu wanted peace with the Palestinians and was serious about resuming the face-to-face Middle East peace talks that broke off in December 2008.

For the Israeli leader's part, he pledged "we're committed" to peace with the Palestinians and said any reports of the demise of the US-Israeli relationship are 'flat wrong'."

Mr Netanyahu and Mr Obama talked in the Oval Office as protesters gathered across the street in Lafayette Park and chanted "No More Aid, End the Blockade", referring to Israel's blockade of the Gaza Strip.

The meeting between Mr Obama and Mr Netanyahu was their first since a troubled White House meeting between them in March, after Israel's surprise announcement of plans for new construction in east Jerusalem as US vice-president Joe Biden was in Israel and preparing for dinner with the prime minister.

Mr Netanyahu on Sunday endorsed the US call for direct talks between the Israelis and Palestinians, just days after White House officials said Mr Obama would push during the Oval Office session for those negotiations to get under way sooner rather than later.

White House aides sounded a hopeful tone, saying that weeks of shuttle diplomacy between the two sides by George Mitchell, Mr Obama's special envoy to the Middle East, had paid off and "the gaps have narrowed".

"We believe there are opportunities to further narrow those gaps, to allow the sides to take that next step to direct talks," added Daniel Shapiro, the senior Middle East director at the National Security Council.

Mr Obama and Mr Netanyahu were expected to discuss Israel's decision on Monday to significantly ease its blockade of the Gaza Strip to let in most consumer goods.

Israel's ban on exports from Gaza and limits on shipments of construction material remain.

Israel came under heavy international pressure, including from Mr Obama, to loosen its three-year-old land and naval blockade of the seaside territory after Israel's deadly military raid on 31 May, on a flotilla trying to break the embargo.

At the time, Mr Obama said the situation was "unsustainable." He called for a narrow blockade to bar weapons that Gaza's Hamas rulers could use against Israel while admitting items the territory's 1.5 million people need for daily living and economic development.

Yesterday's session follows meetings Mr Obama held at the White House in recent weeks with major regional players, including Palestinian president Mahmoud Abbas and King Abdullah of Saudi Arabia.

One major sticking point blocking the resumption of direct talks is Israel's continued construction of Jewish housing in east Jerusalem, an area the Palestinians claim as part of a hoped-for future state.

The Palestinians refuse to sit down with Mr Netanyahu until he agrees to freeze building in areas they want for an independent state. Israel recently said it had no intention of doing that.