Those issues are delicate enough, but the diplomatic row with Israel highlighted the acute sensitivities that Mr. Obama faces as he seeks to link the changes in the Middle East with the conflict at the region’s heart.  “At a time when the people of the Middle East and North Africa are casting off the burdens of the past, the drive for a lasting peace that ends the conflict and resolves all claims is more urgent than ever,” he said.  At one level, by putting the United States on record as supporting the 1967 borders as the starting point for negotiations over a Palestinian state, Mr. Obama was simply endorsing reality: Middle East analysts say a new state would inevitably be drawn on the basis of Israel’s boundaries before the 1967 Arab-Israeli war, which created the contours of today’s Middle East.  Israel’s victory over Egypt and other Arab neighbors in that war expanded its control over territory in the West Bank and Gaza inhabited by millions of Palestinians, creating a greater Israel — including all of the capital, Jerusalem — but one that oversees a resentful occupied population.  Mr. Obama also noted that Israel and the Palestinians would have to swap territory on either side of that border to account for large Jewish settlements that have taken root in the West Bank since 1967.  But the shift moves the United States a step closer to the position of the Palestinians, and is viewed as vital to them because it means the Americans implicitly back their view that new Israeli settlement construction will have to be reversed, or compensated for, in talks over the borders for a new Palestinian state.  Some analysts said Mr. Obama’s shift was less strategic than tactical, seeking to lure the Palestinians back to the negotiating table, as a way of heading off their campaign to seek international recognition of a Palestinian state at the United Nations General Assembly in September.  “He’s moving into a crisis-management mode, laying out principles to preserve the two-state solution and to prevent a U.N. resolution on a Palestinian state,” said Martin S. Indyk, the director of foreign policy at the Brookings Institution.  Mr. Obama expressed opposition to the Palestinian statehood effort, saying, “Symbolic efforts to isolate Israel at the United Nations in September won’t create an independent state.”  He also made several other gestures to Mr. Netanyahu, highlighting the security threats to Israel. Mr. Obama’s reference to a “nonmilitarized” Palestinian state is likely to dismay Palestinians, who have long said that such matters should be decided in negotiations. The president also said that the recent unity agreement between the two main Palestinian factions, Fatah and Hamas, raised “profound and legitimate questions for Israel.”  “How can one negotiate with a party that has shown itself unwilling to recognize your right to exist?” he said, referring to Hamas, which the United States has designated as a terrorist organization. “In the weeks and months to come, Palestinian leaders will have to provide a credible answer to that question.”  Mr. Obama’s emphasis on territory and security seemed calculated to segregate the issues on which the United States believes the Israelis and Palestinians can bargain. He said they should leave aside for now more deeply emotional questions like the status of Jerusalem and the fate of Palestinian refugees, which he suggested could be dealt with after border and security issues.  But Mr. Obama spoke with palpable frustration that his peacemaking efforts so far had failed. “The international community is tired of an endless process that never produces an outcome,” he said to an audience that included George J. Mitchell, who was his special envoy to the Middle East until resigning last week.  Beyond the stalled peace process, Mr. Obama celebrated “a moment of opportunity” after six months of political upheaval that has at times left the administration scrambling to keep up. Mr. Obama bluntly warned President Bashar al-Assad of Syria that he would face increasing isolation if he did not respond to demands for a transition to democracy.  “President Assad now has a choice,” Mr. Obama said. “He can lead that transition, or get out of the way.”  He was no less blunt in the case of Bahrain, a close ally that has brutally cracked down on protests there.  “The only way forward is for the government and opposition to engage in a dialogue, and you can’t have real dialogue when parts of the peaceful opposition are in jail,” he said in one of the few phrases that drew applause from an audience that included diplomats from a dozen Arab countries.  While he conceded that the United States had not been a central actor in the uprisings, he sought to cast America’s role in a new context now that the war in Iraq is winding down and Osama bin Laden has been killed. In such a world, Mr. Obama said, strategic interests must not trump values.  “We must acknowledge that a strategy based solely upon the narrow pursuit of these interests will not fill an empty stomach or allow someone to speak their mind,” Mr. Obama said.  A version of this article appears in print on May 20, 2011, on page A1 of the New York edition with the headline: OBAMA SEEKS END TO THE STALEMATE ON MIDEAST TALKS. Order Reprints| Today's Paper|Subscribe
President Obama said that a lasting peace would require two states with secure borders in a speech Thursday that sought to harness the change unfolding in the region.