US President Barack Obama on Monday welcomed Prime Minister Binyamin Netanyahu's endorsement of Palestinian independence as a way to restart peace talks and called on Arab neighbors to join the discussion. Obama also downplayed the immediate criticism from Arab neighbors of Netanyahu's conditions as predictable. "Well, first of all, I think it's important not to immediately assess the situation based on commentary the day after a speech," said Obama, whose aides distributed glowing reaction to his US-Muslim speech the day after he delivered it in Cairo. "I think any time an Israeli prime minister makes a statement, the immediate reaction tends to be negative on one side. If the other side is making a statement, oftentimes the reaction is negative in Israel," he said. Netanyahu refused to freeze existing West Bank settlements, while demanding that the Palestinians recognize Israel as a Jewish state and Palestinians refugees give up their goal of returning to Israel. He insisted that a Palestinian state be demilitarized, and demanded that Jerusalem remain the capital of Israel. Obama emphasized points of Netanyahu's speech he found agreeable - specifically the call for two states- but not the caveats. "There were a lot of conditions, and obviously working through the conditions on Israel's side for security, as well as the Palestinian side for sovereignty and territorial integrity and the capacity to have a functioning, prosperous state, that's exactly what negotiations are supposed to be about," Obama said. "But what we're seeing is at least the possibility that we can restart serious talks," he said. Obama repeated his position that the United States would stand behind Israel's defense, but he told both sides' leaders that they face difficult political choices. "On the Israeli side, that means a cessation of settlements," said Obama, who publicly told Netanyahu the same during an Oval Office meeting earlier. To the Palestinians, Obama repeated that leaders must end anti-Israeli rhetoric in schools and recognize Israel. "Those are necessary pillars of any serious agreement that's to be reached," he said. Obama also said that Arab neighbors must work with the Palestinians to tamp down tensions. "Israel's security concerns extend beyond simply the Palestinian Territories," he said. "They extend to concerns that they have in a whole host of neighbors where there's perceived - and often real - hostility towards Israel's security." Obama's remarks came at the end of an Oval Office meeting with Italian Premier Silvio Berlusconi.