Obama says settlement building illegitimate

US President Barack Obama said Wednesday that the time has come to relaunch negotiations toward the long-elusive goal of Mideast peace.

In a speech to the United Nations General Assembly in New York, Obama said it was time for talks without preconditions to resolve disagreements on security for Israelis and Palestinians, borders, refugees and the status of Jerusalem itself.

The president said the goal was clear: "Two states living side by side in peace and security." He said resolving the Mideast issue was essential to promoting a future of peace and prosperity.

World leaders listen to Obama (Photo: AFP)

Obama said the US does not view continued Israeli settlement building as legitimate.

"We continue to call on Palestinians to end incitement against Israel and we continue to emphasize that America does not accept the legitimacy of continued Israeli settlements," the US president said.

"Upon taking office, I appointed a special envoy for Middle East Peace, and America has worked steadily and aggressively to advance the cause of two states – Israel and Palestine – in which peace and security take root, and the rights of both Israelis and Palestinians are respected," he added. 

"The time has come to re-launch negotiations without preconditions that address the permanent-status issues: security for Israelis and Palestinians; borders, refugees and Jerusalem. The goal is clear: two states living side by side in peace and security: a Jewish State of Israel, with true security for all Israelis; and a viable, independent Palestinian state with contiguous territory that ends the occupation that began in 1967, and realizes the potential of the Palestinian people. As we pursue this goal, we will also pursue peace between Israel and Lebanon, Israel and Syria, and a broader peace between Israel and its many neighbors. In pursuit of that goal, we will develop regional initiatives with multilateral participation, alongside bilateral negotiations."

'Iran must be held to account for nukes'

Separately, Obama also said that the US would not allow al-Qaeda to launch attacks from safe havens in Afghanistan or any nation.

He said he was committed to diplomacy with Iran and North Korea but that both nations must be held to account if they chose to pursue nuclear weapons.

"I am committed to diplomacy that opens a path to greater prosperity and a more secure peace for both nations if they live up to their obligations," Obama said.

"But if the governments of Iran and North Korea ... are oblivious to the dangers of escalating nuclear arms races in both East Asia and the Middle East – then they must be held accountable," he added.

Obama called for "a new era of engagement" with the world, pledging to work together with other countries while defending the interests of the United States.

"The time has come for the world to move in a new direction. We must embrace a new era of engagement based on mutual interest and mutual respect," Obama said.

Obama said discontent at perceived US unilateralism had fed "an almost reflexive anti-Americanism" that too often had served as an excuse for collective inaction.

Reuters and The Associated Press contributed to this report