US President Barack Obama said on Saturday it was vital to break the "stalemate" in the Middle East peace process, saying all sides had to recognise that their fate was inextricably linked.
"We have to move beyond the current stalemate," Obama said at a press conference in France where he was to attend commemorations marking the 65th anniversary of D-Day.
"Progress would mean the parties involved, supported by not just the United States, not just by France but by other Arab states, are making serious constructive steps towards a two state solution," he said when asked what he wanted to see by the end of the year.
"I do not expect that a 60-year problem is solved overnight, but as I said before I do expect both sides to recognise that their fates are tied together and that it is in the interests of Israel, in its security interests, and in the interests of the Palestinians to resolve this in a peaceful way."
Obama, who has called on Israel to halt all its settlement activity in the occupied West Bank, said he wanted Arab nations to all be part of the peace process.
"The Arab states have to be a part of this process," said the US president.
"They are going to have to step up as well because Arab states are not only important politically but are important economically.