US President Barack Obama has voiced his support for the creation of a Palestinian state in talks with Israeli prime minister Benjamin Netanyahu.
Mr Obama said: 'We talked about restarting serious negotiations on issues of Israel and the Palestinians.
'I believe it is in the interest not only of the Palestinians but also the Israelis and the United States and the international community to achieve a two-state solution.'
Mr Netanyahu reiterated that he supported self-government for the Palestinians but made no mention of a state.
'We don't want to govern the Palestinians. We want them to govern themselves,' Mr Netanyahu said.
President Obama also said that Israeli settlement building in the West Bank must end.
'We have to make progress on settlements. Settlements have to be stopped,' Mr Obama said.
He said that Israel has a clear obligation to stop building settlements under the road map for peace agreed in 2003.
The leaders spent an hour alone together in the Oval Office in an attempt to forge a closer relationship in their first meeting since both came to power.
Mr Obama admitted in March that Mr Netanyahu's election did not make peacemaking any easier.
President Obama said he will assess whether Iran was serious about nuclear talks by the end of this year.
'We are not going to have talks forever,' Mr Obama said.
'My expectation would be that if we begin discussions soon, shortly after the Iranian elections, we should have a fairly good sense by the end of the year as to whether they are moving in the right direction.'
Israeli Foreign Minister Avigdor Lieberman said this month that world powers should take action against Iran if it does not curb its nuclear activities by August.
If diplomacy fails, Israeli leaders have not ruled out military strikes against Iran, which maintains it is enriching uranium for power generation.
Mr Netanyahu is also to have a working dinner with Secretary of State Hillary Clinton, and to hold talks with US national security advisor James Jones.
