There is need for Israelis and Palestinians to find mechanisms in which to dialogue and arrive at peace, Obama said in Oval office in the presence of the visiting Israeli President Reuven Rivlin.
"And although, obviously, this is a time at which the prospects of serious peace may seem distant, it's important that we continue to try," Obama said.
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Thanking Obama on his declaration about the need to fight extremism, whatever and wherever Rivlin said Israel was not at war with Islam.
"We are really going hand-in-hand with those ideas and these ideas. We have no war with Islam. We have war against those who are using ideas in order to create extremism and threats to the whole innocent people in the world," he said.
During the meeting Obama underscored the abiding US commitment to the US-Israeli relationship and to further strengthening Israel's security.
During the meeting, the leaders discussed the ongoing bilateral talks regarding a new 10-year Memorandum of Understanding on security assistance to Israel, which resumed last week.
Obama and Rivlin also discussed regional challenges, including the conflict in Syria and ISIS, the White House said in a readout of the meeting.
"The leaders discussed their mutual concern about the ongoing violence in Jerusalem, the West Bank, and Israel, and the importance of Israeli and Palestinian leaders taking steps to reduce violence and restore calm through both action and rhetoric," the White House said.
"The President underscored the commitment of the United States to a two-state solution, to the vision of a viable, sovereign Palestinian state living side-by-side in peace and security with a democratic, secure Jewish state of Israel," the White House said.
Later the two leaders attended a Hanukkah reception at the White House.
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