U.S. President Barack Obama has said there is hope for peace in the Middle East, but told Israeli media that is not "blindly optimistic".

Israel is right to be skeptical about the peace process, he told Israeli television in a yet-to-be-aired interview that was taped on Wednesday. He noted during the interview that many people thought the founding of Israel was impossible, so its very existence should be a "a great source of hope."
Benjamin Netanyahu and Barack Obama

The interview with the U.S. president took place a day after he met Prime Minister Benjamin Netanyahu in Washington.

Netanyahu promised Obama during their meeting that Israel would undertake confidence-building steps toward the Palestinian Authority in the coming days and weeks. These steps are likely to include the transfer to PA security forces responsibility for more parts of the West Bank.

The two leaders met alone for about 90 minutes Tuesday evening, during which time they discussed the peace process with the Palestinians, the Iranian nuclear program, and the strategic understandings between their two countries on Tehran's efforts to achieve nuclear capabilities.

"There are going to need to be a whole set of confidence-building measures to make sure that people are serious and that we're sending a signal to the region that this isn't just more talk and more process without action," the U.S. president said during the joint press conference.

"I believe that Prime Minister Netanyahu wants peace. I think he's willing to take risks for peace... Now more than ever I think is the time for us to seize on that vision. And I think that Prime Minister Netanyahu is prepared to do so... We expect [the] proximity talks to lead to direct talks, and I believe that the government of Israel is prepared to engage in such direct talks," Obama said.

Obama had warm words about Netanyahu after their talks and affirmed the unbreakable bond that links the United States and Israel.The last meeting between the two leaders earlier this year had been frosty, overshadowed by Israel's announcement of construction in East Jerusalem despite the temporary settlement freeze.

Netanyahu described the meeting as positive, adding that America has no better friend or ally than the State of Israel.

On Wednesday, Netanyahu told U.S. Jewish leaders that direct Palestinian-Israeli talks would begin "very soon", but warned that they would be "very, very tough."

Netanyahu told his cabinet earlier this week before flying to Washington that the time had come for Palestinian President Mahmoud Abbas to prepare to meet directly with the Israelis, as it was the only way to advance peace.

Israelis and Palestinians have been holding indirect talks mediated by Obama's special envoy to the Middle East, George Mitchell. Aides to Obama sounded a hopeful tone regarding the negotiations last week, telling reporters that the shuttle diplomacy between the two sides had paid off and the gaps have narrowed.

At a meeting with representatives of Jewish organizations at the Plaza Hotel late Wednesday, Netanyahu discussed the efforts to promote Middle East peace."This is going to be a very, very tough negotiation," he said, adding: "The sooner the better."

"Direct negotiations must begin right away, and we think that they will," he said.