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US President Barack Obama has called for ‘redoubled efforts’ towards a two-state solution for Israel and Palestine in Dresden.

On a visit to the eastern German city, Mr Obama called on all nations ‘to redouble our efforts’ towards separate Israeli and Palestinian states.

‘I think the moment is now for us to act on what we all know to be the truth, which is each side is going to have to make some difficult compromises.’ he declared.

Mr Obama said that the Palestinian Authority must prevent actions and statements that incite violence and that Israel must live up to commitments it made under the so-called road map peace plan to stop constructing illegal settlements on occupied Palestinian land.

He added: ‘I recognise the very difficult politics in Israel of getting that done and I’m very sympathetic to how hard that will be.’

But unnamed Israeli officials responded by reiterating Israeli Prime Minister Benjamin Netanyahu’s decision to allow existing settlements to expand.

They said that instead of halting all settlement activity, Israel planned to dismantle 22 unauthorised settlement outposts in the West Bank in the coming weeks.

Speaking alongside German Chancellor Angela Merkel, Mr Obama said: ‘The United States can’t force peace upon the parties.’ But he claimed that the US had ‘at least created the space, the atmosphere, in which talks can restart.’

The US President announced he was sending special envoy George Mitchell back to the Middle East next week.

He will follow up on Mr Obama’s speech in Cairo on Thursday, in which the US President called for both Israeli and Palestinian leaders to make compromises towards a settlement.

Fresh from visits to Saudi Arabia and Egypt, Mr Obama said that while regional powers and the entire international community must help Israelis and Palestinians achieve peace, ‘ultimately the parties involved have to make the decision that the prosperity and security of their people are best served’ by an accord.

Ms Merkel promised to co-operate in endeavours towards a two-state solution.

She said the two leaders had discussed a timetable for a peace process but did not elaborate.

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