WRAP-UP: Obama makes direct peace appeal to Israeli public

After brief visit to occupied W. Bank, US president insists Palestinians 'must recognise that Israel will be Jewish state' and that 'Israelis have right to insist on security'

US President Barack Obama appealed directly on Thursday to the Israeli people to put themselves in the shoes of stateless Palestinians and recognise that Jewish settlement activity in occupied territory hurts prospects for peace.
In a showcase speech in Jerusalem to Israeli university students, Obama coupled his plea with an acknowledgement of the Jewish state's security concerns in a region destabilised by the West's nuclear standoff with Iran and civil war in Syria.
But he urged Israel's younger generation to demand that their politicians take risks for peace in an address interrupted frequently by applause, including a standing ovation for the president during a brief outburst by a heckler.
"You must create the change that you want to see," he told his youthful audience.
Obama, on his first official visit to Israel and the occupied West Bank, said only peace could bring true security, but he did not offer any new ideas on how to revive Israeli-Palestinian peace negotiations, stalled since 2010.
"Given the demographics west of the Jordan River, the only way for Israel to endure and thrive as a Jewish and democratic state is through the realisation of an independent and viable Palestine," he said.
It was a clear warning that Israel's continued hold over the West Bank, territory captured along with the Gaza Strip and East Jerusalem in the 1967 Middle East war, would ultimately lead to an Arab majority in land controlled by the Jewish state.
"Israelis must recognise that continued settlement activity is counterproductive to the cause of peace, and that an independent Palestine must be viable, that real borders will have to be drawn," Obama said, stopping short of calling for a construction freeze.
"Put yourself in their (Palestinians') shoes. Look at the world through their eyes," he said. "It is not fair that a Palestinian child cannot grow up in a state of her own, and lives with the presence of a foreign army that controls the movements of her parents every single day."
Obama has received an effusive welcome in Israel since his arrival on Wednesday, hoping to reset his often troubled relationship with Israeli Prime Minister Benjamin Netanyahu.
"America will do what we must to prevent a nuclear Iran," he told his enthusiastic audience, reinforcing a main theme of his visit to Israel and adding that Washington and its allies still thought there was time for a diplomatic solution.
Sprinkling in Hebrew words meaning "you are not alone", Obama said: "Today, I want to tell you - particularly the young people - that so long as there is a United States of America, 'ahtem lo levad'."
In a brief statement after Obama's speech, Netanyahu thanked him for "his unconditional support for the state of Israel" and said he shared the president's view that peace, ensuring Israelis' security, should be sought.
Obama has faced the tough task of winning over sceptical Israelis after he bypassed their country in 2009 when visiting Egypt and offered a "new beginning" to the Muslim world in a speech at Cairo University.
Four years on, students at the school said Obama had not lived up to his promises.
"I don't see any change in American policy toward the Middle East since Obama's speech," said Mayada Mohammad Yousef, 19. "This is because Obama promised the implementation of a two-state solution and to stop settlements ... and he has not achieved any of this."
West Bank visit
The mood was also tinged with disappointment in the West Bank city of Ramallah, which Obama visited before his Jerusalem speech. Meeting Palestinian President Mahmoud Abbas for three hours, Obama pressed the Western-backed leader to drop his demand for a settlement freeze before peace talks can resume.
The core issue now, Obama said at a news conference with Abbas, was how to achieve sovereignty for Palestinians and security for Israelis.
"That's not to say settlements are important. That's to say if we solve those problems, the settlement issue will be resolved," Obama said.
About 500,000 Israelis live in the West Bank and East Jerusalem, home to 2.5 million Palestinians. Most countries regard Israel's settlements as illegal. Israel cites historical and Biblical roots to the West Bank and Jerusalem.
In Ramallah, about 150 Palestinian demonstrators protested against Obama's visit. Held back by ranks of police from nearing Abbas's compound, they raised their hands to wave away the helicopter that brought Obama to the city.
"We want RPGs (rocket-propelled grenades), not collaboration with the CIA," they shouted.
Obama, embarking on a second and final four-year term in the White House, has made clear he is not bringing any new peace initiatives and has instead has come to Israel and the Palestinian Territories on a "listening" tour.
But he said his new secretary of state, John Kerry, would spend a significant amount of time and energy trying to narrow differences between the two sides as the United States seeks to move them back to the negotiating table.
A US official said Kerry would return to Israel for talks after accompanying Obama to Jordan on Friday and Saturday.
As a reminder of the ever-present risks in the region, Iranian state television quoted Supreme Leader Ayatollah Ali Khamenei as saying Tehran would raze Tel Aviv and the city of Haifa if Israel carried out veiled threats to attack Iran.
And Palestinians in the Gaza Strip fired two rockets into Sderot, a southern Israeli town that Obama visited when running for president in 2008. Police said no one was hurt.
A small Islamist militant group, Magles Shoura al-Mujahddin, claimed responsibility. Obama is not going to visit Gaza, which is controlled by the Islamist group Hamas, a rival to Abbas, who condemned the attack.