WASHINGTON – US President Barack Obama called for a demilitarized Palestinian state along the 1967 borders with agreed upon land swaps in a landmark speech Thursday on the changes sweeping the Middle East.

In a wide-ranging address at the State Department, Obama devoted considerable attention to the Israeli-Palestinian issue, whose peaceful resolution he called “more urgent than ever,” and pushed back against those who have said the current tumult prevented a serious peace process.

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“While the core issues of the conflict must be negotiated, the basis of those negotiations is clear: a viable Palestine, a secure Israel,” he declared. “We believe the borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps, so that secure and recognized borders are established for both states.”

Though he stressed that the United States can’t impose a solution, “what America and the international community can do is to state frankly what everyone knows -- a lasting peace will involve two states for two peoples: Israel as a Jewish state and the homeland for the Jewish people, and the state of Palestine as the homeland for the Palestinian people.”

Obama fleshed that out further by stating that Palestinians should have “a sovereign, non-militarized state” and that there must be provisions for stopping terrorism, weapons smuggling and border security. He called for a “full and phased withdrawal” of the IDF to be coordinated with the Palestinians during a transition period with a clear duration and demonstrated security effectiveness.

“These principles provide a foundation for negotiations,” he stated. “Palestinians should know the territorial outlines of their state; Israelis should know that their basic security concerns will be met.”

He pointedly skipped making any proscriptions on the “wrenching and emotional” issues of Jerusalem and Palestinian refugees but argued that “moving forward now on the basis of territory and security provides a foundation to resolve those two issues in a way that is just and fair.”

Obama’s comments codify long-standing American policy in a more explicit and detailed format than his predecessors offered. US President George W. Bush was the first to call for a Palestinian state and later referred to “mutually agreed changes” to the 1949 armistice lines as its basis in a 2004 letter to then prime minister Ariel Sharon.

The greater significance of his comments is likely to come in how they are perceived by both parties, as well as what they indicate about the United States’ intentions on shepherding the peace process. Though the US has not been engaged in active diplomacy since the talks broke down last year, this could signal an effort to raise the profile of US involvement in the issue.

It comes at a time when the Palestinians are threatening to go to the UN for a unilateral declaration of Palestinian statehood, a move that concerns Israel and is sure to be a subject of discussion when Netanyahu arrives at the White House Friday.

Obama strongly rebuked the Palestinians for this tactic Thursday, saying, “Symbolic actions to isolate Israel at the United Nations in September won’t create an independent state.”

He also warned Palestinians that “efforts to delegitimize Israel will end in failure” and that they would “never realize their independence by denying the right of Israel to exist.”

He also chastised both sides for taking steps that don’t help the peace process.

“Israeli settlement activity continues. Palestinians have walked away from talks,” he said. “The world looks at a conflict that has grinded on and on and on, and sees nothing but stalemate.”

Israel has expressed doubt that any progress towards negotiations can be made for the time being with the recent announcement of a Palestinian unity government that will include the Islamic militant group Hamas.

Obama acknowledged these concerns when he referred to the unity deal as raising “profound and legitimate questions for Israel” and emphasized that “in the weeks and months to come, Palestinian leaders will have to provide a credible answer to that question.” Elsewhere he said, “Palestinian leaders will not achieve peace or prosperity if Hamas insists on a path of terror and rejection.”

He also stressed American support for Israel: “Our friendship is rooted deeply in a shared history and shared values. Our commitment to Israel’s security is unshakable. And we will stand against attempts to single it out for criticism in international forums.”

He then continued, “But precisely because of our friendship, it’s important that we tell the truth: The status quo is unsustainable, and Israel too must act boldly to advance a lasting peace.” He added, “The dream of a Jewish and democratic state cannot be fulfilled with permanent occupation.”

While Obama noted the emotive nature of the Palestinian issue for the broader Arab world, he also criticized dictators for deflecting attention from their autocratic rule by focusing on Israel.

“Antagonism toward Israel became the only acceptable outlet for political expression,” Obama said.

His speech was delivered in response to the Arab uprisings against these autocracies, and Obama pledged American support for those who sought democracy and freedom.

“There must be no doubt that the United States of America welcomes change that advances self-determination and opportunity,” he said. “Yes, there will be perils that accompany this moment of promise. But after decades of accepting the world as it is in the region, we have a chance to pursue the world as it should be.”

He stressed, “The status quo is not sustainable. Societies held together by fear and repression may offer the illusion of stability for a time, but they are built upon fault lines that will eventually tear asunder.”

Obama criticized Syrian leader Bashar Assad for firing on his own citizens, who have taken to the streets to demand such self-determination.

But he didn’t refer to Assad as illegitimate, much less call on his to go, as he has with other Arab leaders in similar positions, as some had speculated he would before the speech.

Instead, he said, “President Assad now has a choice:  He can lead that transition, or get out of the way. The Syrian government must stop shooting demonstrators and allow peaceful protests.”

He also called on Assad to “start a serious dialogue to advance a democratic transition,” warning that “otherwise, President Assad and his regime will continue to be challenged from within and will continue to be isolated abroad.”

He spoke of significant American aid to help Egypt and Tunisia reach democracy, and spokes of the need for religious freedom and rights for women throughout the Arab world.

Obama concluded with his comments on the peace process, and used the experience of bereaved Israelis and Palestinians who chose to seek reconciliation rather than violence as a message for the greater region.

“That is the choice that must be made -– not simply in the Israeli-Palestinian conflict, but across the entire region -– a choice between hate and hope; between the shackles of the past and the promise of the future,” he said. “It’s a choice that must be made by leaders and by the people, and it’s a choice that will define the future of a region that served as the cradle of civilization and a crucible of strife.

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