Seeking to shore up reforms in long-isolated Burma, President Barack Obama pressed the country's leader to hold inclusive elections next year and respect the rights of its persecuted Muslim minority. But despite setbacks on those fronts, Obama insisted that he remains optimistic about Burma's move toward democracy.

"We recognize that change is hard and it doesn't always move in a straight line," Obama said following a nighttime meeting with Burma's President Thein Sein at his opulent palace. "But I am optimistic about the possibilities for Burma."

Burma's president said he had a candid discussion with Obama about the need for more progress and insisted that he was committed to that effort. But he said that on some aspects of the political and economic reforms his country has outlined, more time will be needed.

Obama has made democratization in Burma a central part of his policy in Asia. After the country's unexpected shift away from a half-century of military rule, the U.S. rewarded its promises of reforms with suspended sanctions and a flurry of visits from high-level officials, including Obama, who first visited in 2012.

But progress hasn't come quickly to this once-reclusive nation. A nationwide cease-fire with armed ethnic groups has yet to materialize. Burma's pro-democracy opposition figure, Nobel laureate Aung San Suu Kyi, is banned from next year's pivotal elections. Scores of Rohingya Muslims are fleeing for fear of violence at the hands of Buddhist mobs, while roughly 140,000 more remain trapped in camps under dismal conditions.

Obama arrived in Burma Wednesday for a pair of Asia-Pacific summits. But he was using the rest of his time here to push the country's leaders to address those matters or risk losing out on deeper investment from the U.S.

After speeding along an empty eight-lane highway, Obama's limousine passed over a moat and pulled up to an oversized presidential palace, where beams of light cycled through red, blue and purple as they lit up a resplendent bay of fountains shooting water high into the air. Inside, gold carpet and furniture accentuated the white marble of the palace as Thein Sein greeted Obama and his delegation at the start of their meeting.

Obama's meeting with Thein Sein, himself a former member of the junta, offered Obama his first major opportunity to address Burma's state of affairs since he set off Sunday on a weeklong tour of Asia and Australia. But in China, on the first leg of the trip, Obama treaded lightly on human rights issues and other areas where pushing a firm stance could have upset his hosts.

On his first full day in Burma, Obama announced the U.S. would start sending Peace Corps volunteers there in late 2015. The White House said the volunteers would train for three months to learn Burma's language, culture and technical needs, then serve at sites in Burma for two years.

Obama's met briefly Thursday with Burma's pro-democracy icon Aung San Suu Kyi at a sparsely equipped building in Naypyitaw, a city whose very existence is an ode both to Burma's aspirations for democracy and its challenges in making it work. Carved from scratch out of scrubland in the early 2000s, Naypyitaw has the lush hotels and grandiose public buildings of a modern capital, but its vast empty spaces and eerily empty multilane highways have led to its reputation as a ghost town.

At the Parliamentary Resource Center, a hub for aid organizations, Obama told Suu Kyi and her fellow parliamentarians he was heartened by their determination to move ahead with the transition. He said in some ways, the questions facing Burma echo those that Americans have faced, like how to include minorities or prevent institutional discrimination.

"There are times when we'll offer constructive criticism about a lack of progress," Obama said. "But our consistent aim and goal will be to see that this transition is completed so that it delivers concrete benefits for the people."

Obama and Suu Kyi will hold more extensive talks Friday in Yangon at the lakeside house where the opposition leader was under house arrest for years.

White House officials said Burma's treatment of the minority Rohingya Muslims was high on Obama's agenda for his meetings. Another key U.S. concern is the need for constitutional reforms, such as the elimination of a rule that is keeping Suu Kyi off the ballot because her sons hold British citizenship.

In a sign of Obama's high regard for the opposition leader, when Obama called Thein Sein late last month to lay the groundwork for the visit, he placed a call the same day to Suu Kyi.