US President Barack Obama reassured Arabs with his unambiguous support for a Palestinian state this week and he nudged Israel's conservative government, which has carefully avoided committing itself to that goal.

Visiting Turkey, Obama twice in two days said he backed a two-state solution to end the Israeli-Palestinian conflict despite the fact that Israeli Prime Minister Benjamin Netanyahu has shied away from the phrase.

Netanyahu's far-right foreign minister, Avigdor Lieberman, has gone further, saying the peace process is at a "dead end" and that Israel is not bound by the US-backed 2007 Annapolis declaration in which the two sides agreed to pursue "the goal of two states."

"By saying what he said in Turkey, I think it sent a clear signal about the two-state solution. It's non-negotiable. It has now become a pillar of US policy," said Ghaith al-Omari, advocacy director for the American Task Force on Palestine.

"Netanyahu has been dancing around the issue, apparently because of domestic politics, but he will have to take a position before he comes here and meets Obama," al-Omari, a former adviser to Palestinian President Mahmoud Abbas, added, saying the prime minister is expected in Washington in May.

Having pledged to make Arab-Israeli peace a priority and having named former US Senator George Mitchell as his special envoy two days after taking office, Obama now hopes to coax a skeptical Netanyahu into talks with the Palestinians.

Netanyahu has been vague about renewing talks over thorny territorial issues, saying his priority was to focus on the creation of development zones and ways to ease roadblocks and checkpoints that inhibit travel and trade in the West Bank.

The US strategy may be to try to maneuver Netanyahu into expressing support, directly or indirectly, for a pursuing two-state solution.

"Without that, it's very hard to move this forward," said a diplomat familiar with the Obama administration's thinking.

JEWISH SETTLEMENTS KEY INDICATOR

Daniel Levy, a former Israeli official now at the New America Foundation think tank in Washington, said that Obama's reference to the US-hosted Annapolis conference was also a form of "push back" against the new Israeli government.

However, analysts said it was far too early to gauge how hard Obama might be willing to push Netanyahu to make the compromises necessary to secure any peace agreement.

For now, the new US and Israeli governments are still taking one another's measure.

Analysts said Mitchell's trip to the Middle East next week, his first since Netanyahu took office, would be a chance for the Obama administration to gauge his interest in peace and his willingness to resume negotiations.

Israeli and Palestinian peace negotiators failed in their bid to reach a peace deal by the end of 2008 and their talks have been stalled since Israel's land and air invasion of Gaza in December to counter rocket attacks on the Jewish state.

Several analysts said that the key barometer to watch will be the US stance on Jewish settlements.

Under the 2003 US-backed "road map" peace plan Israel was obligated to halt all settlement activity but it has steadily expanded the settlements.

"The telling issue over the next six months will be how the two sides will deal with that issue," said Alterman. "From that, a huge amount will follow."