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NEW YORK (Reuters) - Democrat Barack Obama misused a "code word" in Middle East politics when he said Jerusalem should be Israel's "undivided" capital but that does not mean he is naive on foreign policy, a top adviser said on Tuesday.
Addressing a pro-Israel lobby group this month, the Democratic White House hopeful said: "Jerusalem will remain the capital of Israel, and it must remain undivided."
The comment angered Palestinians, who want East Jerusalem, captured by Israel in 1967, as the capital of a future state. "He has closed all doors to peace," Saeb Erekat, an aide to Palestinian Authority President Mahmoud Abbas, said after the June 4 speech.
Obama later said Palestinians and Israelis had to negotiate the status of the city, in line with long-held U.S. presidential policy.
Daniel Kurtzer, who advises Obama on the Middle East, said Tuesday at the Israel Policy Forum that Obama's comment stemmed from "a picture in his mind of Jerusalem before 1967 with barbed wires and minefields and demilitarized zones."
"So he used a word to represent what he did not want to see again, and then realized afterwards that that word is a code word in the Middle East," Kurtzer said.
The U.S. Congress passed a law in 1995 describing Jerusalem as the capital of Israel and saying it should not be divided, but successive presidents have used their foreign policy powers to maintain the U.S. Embassy in Tel Aviv and to back talks between Israel and Palestinians on the status of Jerusalem.
In practice, U.S. foreign policy is broadly aligned with that of the United Nations and other major powers, which do not view Jerusalem as Israel's capital and do not recognize Israel's annexation of Arab East Jerusalem after the 1967 war.
One member of the audience who said the remark -- and its subsequent clarifications -- did not speak well of Obama's foreign policy knowledge.
Kurtzer said it was unfortunate that so much time was being spent dwelling on one word of a 30-minute speech, "but it does not indicate any kind of navet about foreign affairs."
He said Obama's speech showed a strong contrast with the policies of Republican hopeful John McCain.
"You either run it the way we've run it for the past eight years, or you engage, including with your enemies," he said.
Kurtzer, who teaches at Princeton, served under President George W. Bush as ambassador to Israel from 2001 to 2005 and was ambassador to Egypt under Bill Clinton.
Obama has faced wariness among some Jewish voters over his commitment to Israel, fuelled by suspicion over his comments indicating willingness to talk to Iranian leaders.
"We do not at all recommend any diminution of U.S. support for Israel," Kurtzer said.
But he said U.S. policy needed to be made in Washington.
Kurtzer said Obama's willingness to engage with enemies did not extend to Hamas, and that position was unlikely to change even after the Palestinian militant group agreed an Egyptian-brokered ceasefire with Israel this week.
Editing by Doina Chiacu and Michelle Nichols