Updated

WASHINGTON -- President Obama says there is hope for peace between Israel and the Palestinians, but that does not mean that he is "blindly optimistic." The comments came as his administration and a crucial Arab ally stepped up appeals for the two sides to return to direct negotiations.

In an interview taped Wednesday for Israeli television, Obama said Israel is right to be skeptical about the peace process. But he noted that many people thought the founding of Israel was impossible, so the Jewish state's very existence should be "a great source of hope."

The interview followed a White House meeting on Tuesday between Obama and Israeli Prime Minister Benjamin Netanyahu at which the two leaders expressed support for upgrading current indirect Israeli-Palestinian talks that are being mediated by US peace envoy George Mitchell. The Palestinians demand that Israel freeze settlement construction before direct talks can be resumed.
Obama and Netanyahu said the two sides should begin speaking directly to each other.

That sentiment was echoed on Wednesday by Secretary of State Hillary Rodham Clinton and Jordanian Foreign Minister Nasser Judeh, whose country is deemed critical to the peace process. Jordan and Egypt are the only Arab countries officially at peace with Israel.

"Moving to direct talks as soon as possible is in the interests of the Israelis, the Palestinians, the region and the world," Clinton told reporters after meeting Judeh at the State Department. "The sooner that the Israelis and the Palestinians get into direct negotiations, the sooner they can actually make decisions."

"Direct talks ... must resume quickly," Judeh said, adding that the negotiations must "be timebound, benchmarked and conducted in good faith." He said once direct talks begin, Arab nations will start to provide tangible support for the peace process.

Earlier in Cairo, however, the head of the Arab League said indirect talks between Israel and the Palestinians are failing and there is a little chance for a shift to direct negotiations. Amr Moussa, a former Egyptian foreign minister, said senior Arab diplomats will meet July 29 to evaluate the results of the indirect talks, which started in May.

In his Israeli television interview, Obama also recalled visiting Jerusalem before he became president. He described wandering anonymously through the Old City as "a profound pleasure" that he is too well-known to enjoy now.

Obama laughed about leaving a prayer at the Western Wall during his most recent visit, only to have someone remove it and print it in a newspaper.