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 Obama said it was hard to envision a path to a two-state solution
to the conflict - long sought by the United States - given
Netanyahu's pre-election comments that a Palestinian state would not
be established on his watch.
Obama said he would evaluate how best to manage Israeli-Palestinian
relations over the rest of his term as a result.
"The issue is not a matter of relations between leaders," Obama told
reporters at a news conference, noting that he has a "very
businesslike relationship" with Netanyahu.
"This can't be reduced to a matter of somehow let's all, you know,
hold hands and sing 'Kumbaya.' This is a matter of figuring out how
do we get through a real knotty policy difference that has great
consequences for both countries and for the region," Obama said.
 Relations between the two leaders have been strained over U.S.
efforts to reach an international agreement with Iran to curb
Tehran's nuclear program.
Netanyahu has sought to walk back his comments about the two-state
solution, but Obama said the "corrective" came with conditions that
would be "impossible to meet any time soon" and said that the
prospects of an agreement appeared dim.
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"We can't continue to premise our public diplomacy based on
something that everybody knows is not going to happen, at least in
the next several years," Obama said, warning the issue could
escalate.
"That may trigger, then, reactions by the Palestinians that, in
turn, elicit counter-reactions by the Israelis, and that could end
up leading to a downward spiral of relations that will be dangerous
for everybody and bad for everybody," he said.
(Additional reporting by Emily Stephenson and Julia Edwards; editing
by Sandra Maler)
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