Saudi Arabia's King Abdullah and US President Barack Obama have stressed the importance of a two-state solution to Middle East peace that secured a Palestinian homeland alongside a strong Israel.

Arab leaders are disappointed that Obama has not made more progress in pressuring Israel to give ground in US-mediated peace talks. Obama will meet with Israeli Prime Minister Benjamin Netanyahu at the White House on July 6.

Obama said his lunch with King Abdullah ranged over various strategic issues, including Iran, Pakistan and Afghanistan, as well as "the importance of moving forward in a significant and bold way in securing a Palestinian homeland that can live side by side with a secure and prosperous Israeli state."

Netanyahu began indirect talks with the Palestinians in May but has imposed strict conditions for accepting their demand for statehood.

In addition, Israeli Foreign Minister Avigdor Lieberman said earlier on Tuesday that problems with the talks, and divisions among the Palestinians, meant no Palestinian state would be founded by 2012. This was an apparent reference to a call by the Quartet -- the US, European Union, UN and Russia -- for an accord by that time.

Obama and King Abdullah "expressed their hope that proximity talks between Israelis and Palestinians will lead to the resumption of direct talks with the aim of two states living side-by-side in peace," the White House said.

King Abdullah only spoke briefly after their meeting, thanking Obama for his hospitality and praising the friendship between their two countries.

"We appreciate all that you personally have done to further broaden and deepen and strengthen this relationship," he said, speaking through in interpreter in the Oval Office.

Analysts say the Saudis want Obama to lean on Netanyahu over stalled peace talks with the Palestinians and on freezing Jewish settlements on occupied Arab land.

White House spokesman Robert Gibbs said the King had assured Obama of his continued support for the Arab Middle East peace initiative.

This is the 2002 plan originated by King Abdullah offering Israel recognition in exchange for returning occupied territories and allowing a Palestinian state alongside Israel.

Last year Obama revived a long-standing US request for Saudi Arabia to make gestures toward normalizing relations with Israel as an incentive to the Jewish state to take up serious negotiations over establishing a Palestinian state. – Reuters