"We take him at his word when he said that it wouldn't happen during his prime ministership, and so that's why we've got to evaluate what other options are available to make sure that we don't see a chaotic situation in the region," Obama told The Huffington Post, referring to Netanyahu's provocative statements opposing the creation of a Palestinian state.
Just before Tuesday's election, Netanyahu declared that there would be no Palestinian state.
Netanyahu's righ-wing Likud party won 30 out of 120 seats in the Knesset and is now likely to form the next coalition government with partners on the right and the centre.
After his victory, Netanyahu backtracked from the remarks and repeatedly said he still wants a two-state solution.
But the White House is refusing to take him at his word.
"I indicated to him that given his statements prior to the election, it is going to be hard to find a path where people are seriously believing that negotiations are possible," Obama said, in his first comments on the issue.
"I did indicate to him that we continue to believe that a two-state solution is the only way for the long-term security of Israel, if it wants to stay both a Jewish state and democratic," he added.
The Israeli Prime Minister has been constantly at loggerheads with President Obama and his recent efforts to undermine the US leader by addressing the Congress without coordinating with the White House has widened the rift.
Netanyahu's ties with Obama strained over US efforts to reach a deal with Iran over its nuclear programme.
The worst crisis in decades in US-Israeli relations was worsened by Netanyahu's rejection of a Palestinian state.
Though he pledged to keep working with the Israeli government on military and intelligence operations, Obama declined to say whether the US would continue to block Palestinian efforts to secure statehood through the UN.
Obama also expressed unhappiness over Netanyahu's remarks about Arab Israeli voters going to the polls "in droves".
"We indicated that that kind of rhetoric was contrary to what is the best of Israel's traditions," he said.
Obama last week called Netanyahu and congratulated him on his electoral victory.
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