As Binyamin Netanyahu moves closer to forming his coalition, US President Barack Obama suggested that peace-making would be harder with the Likud leader at the helm. Asked by the AFP at his prime time press conference Tuesday what an Israeli prime minister "who is not fully signed up to a two-state solution and a foreign minister who has been accused of insulting Arabs" does to the peace process - referring to Netanyahu and Yisrael Beiteinu's Avigdor Lieberman, respectively - Obama replied: "It's not easier than it was, but I think it's just as necessary." While Netanyahu has embraced continuing the previous government's negotiations with Palestinians, he has been more circumspect on endorsing the two-state solution. That puts him at odds with Obama, who reiterated Tuesday night that "it is critical for us to advance a two-state solution where Israelis and Palestinians can live side by side in their own states with peace and security." Noting that the composition of the new Israeli government wasn't yet clear, nor was the future make-up of the Palestinian leadership, Obama still stressed that "the status quo is unsustainable." Obama also emphasized his commitment to keep pushing forward on the Israeli-Palestinian issue as well as reaching out to Iran despite the difficulties of the tasks. He pointed to his video greeting to Iranians last week which, despite his use of the sensitive term "Islamic Republic of Iran" and explicit call to the leadership, was brushed aside by Ayatollah Ali Khamenei. "Some people said, 'Well, they did not immediately say that we're eliminating nuclear weapons and stop funding terrorism.' Well, we didn't expect that. We expect that we're going to make steady progress on this front," Obama maintained. "That whole philosophy of persistence," he said, "is one that I'm going to be emphasizing again and again in the months and years to come as long as I'm in this office." Obama made his remarks about Teheran without prompting from reporters, who focused almost exclusively on the economy during the nearly one-hour press conference. Afghanistan, Iraq and Pakistan were not mentioned once. The president, who has just unveiled an ambitious bank bailout plan as well as a new budget, defended his initiatives as necessary to restore economic stability and future growth. He also rejected criticism over a tax provision that would reduce the deduction for charitable giving among high-income donors, arguing that charities were wrong in their belief that this would reduce contributions. He described the change as a way to "equalize" rates because it would bring charitable deductions for high-income earners level to that of other earners. But the Orthodox Union, one of the Jewish organizations to assail the plan because of its potential affect on charities, argued that a better equalizer would be to raise the deduction for lower income brackets. "Like so many others in the charitable sector, the Union of Orthodox Jewish Congregations remains gravely concerned by President Obama's budget proposal that would harm charities and is disappointed that he continues to press for its adoption," said OU Director of Public Policy Nathan Diament in a statement issued following the press conference.