U.S. presses Israel on two-state solution, settlements

By Matt Spetalnick and David Alexander

WASHINGTON (Reuters) - The Obama administration stepped up pressure on Israel's new government on Tuesday to accept the goal of a Palestinian state and halt expansion of Jewish settlements on occupied land.

Vice President Joe Biden urged Prime Minister Benjamin Netanyahu's right-leaning coalition to commit to a two-state solution, hours before President Barack Obama met Israeli President Shimon Peres to lay the groundwork for Netanyahu's visit later this month.

Since coming to power in March, Netanyahu has balked at recognizing the Palestinians' right to eventual statehood, an omission that has dismayed U.S., Arab and European officials. Peres said Israel would soon clarify its position.

"Israel has to work toward a two-state solution -- you're not going to like my saying this -- but not build more settlements, dismantle existing outposts and allow Palestinians freedom of movement," Biden told the leading U.S. pro-Israel lobbying group.

His challenge to Israel, in a speech to the American Israel Public Affairs Committee, went further than remarks made by Obama in talks last month with Jordan's King Abdullah reiterating U.S. support for Palestinian statehood.

Biden also urged the Palestinians to "combat terror and incitement against Israel" and sought to reassure Israel's supporters that the administration's efforts to engage Iran diplomatically would not endanger the Jewish state's security.

Peres, a Nobel Peace laureate known for more dovish views than the conservative Netanyahu, said Israel should give Obama's new Iran strategy a chance.

Deepening his role in reviving stalled Middle East peace efforts, Obama had White House talks with Peres, who holds a largely ceremonial post. Obama was due to host Netanyahu on May 18 and Palestinian President Mahmoud Abbas later in the month.