President Barack Obama declared today that the borders of Israel and a Palestinian state should revert to 1967 lines, igniting an immediate clash with Israeli Prime Minister Benjamin Netanyahu.
In a long-awaited survey of the "Arab spring" of revolts, Obama compared "shouts of human dignity" across the region to America's birth pangs and civil rights struggles, and said the uprisings showed repression was doomed.
But Obama did not radically adjust US policy approaches to the uprisings which erupted in Tunisia and raged through Egypt, Syria, Yemen and Bahrain. He did not even mention the strong-arm rule of disgruntled US ally Saudi Arabia.
Aides had said that the long-awaited speech at the State Department would capitalise on what Obama sees as a "moment of opportunity" as decades-old repressive regimes face revolts from the humiliated masses.
But it will be his comments on what many Arabs view as a "core" regional issue, the Israeli-Palestinian conflict which will likely get most attention, on the eve of his Oval Office talks with Netanyahu on Friday.
"The borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps, so that secure and recognized borders are established for both states," Obama said in the speech at the State Department.
Netanyahu has vigorously opposed a formula that would see Israel withdraw to the geographical lines in place before the 1967 Arab-Israeli war, and immediately rejected Obama's formula.
In a statement issued by his office, the Israeli leader called on Washington to confirm it would adhere to "assurances" given to Israel by former president George W. Bush in 2004 on not having to go back to 1967 lines.
Netanyahu argues that such a move would leave major Israeli settlements in the West Bank high and dry.
Palestinian leader Mahmud Abbas meanwhile called an urgent meeting of top advisers to discuss his response to the speech.
Although the State Department had previously called for a return to 1967 lines, it was the first time Obama had invested the call with the weight of presidential prestige.
Obama warned Palestinians that the unity deal between Fatah and the radical Islamist Hamas movement posed "profound and legitimate questions" for Israel.
"How can one negotiate with a party that has shown itself unwilling to recognize your right to exist?" Obama said.
He also bluntly told Palestinians that their effort, following the collapse of US-brokered direct talks with Israel last year, to try to win recognition at the UN General Assembly in September would fail.
But Obama offered no new ideas to revive Israeli-Palestinian talks.
The president also used the speech to explain the sometimes contradictory US response to the wave of uprisings in the Middle East and North Africa.
He called on Syrian President Bashar al-Assad to lead a transition or "leave," further stiffening the US line a day after slapping new sanctions on the leadership over a fierce crackdown on demonstrations.
Obama demanded a real dialogue between the government and opposition forces in Bahrain, in a showdown that has forced the United States to chose between a key military ally and its support for universal principles.
And the president said that Yemen's President Ali Abdullah Saleh should follow up on his vows to cede power, and said Libya's Muammar Gaddafi would be "inevitably" forced out.
Obama said that uprisings had shown that repression by autocratic leaders could not stifle demands for individual freedoms.
"Those shouts of human dignity are being heard across the region and through the moral force of non-violence," people have achieved more in six months than terrorists have in decades, Obama said.
Less than three weeks after America killed Osama bin Laden, Obama also argued the Arab revolts proved Al-Qaeda was at a "dead end."
Seeking to spur political change, the president also unveiled a program to offer two billion dollars of debt relief and financing for Egypt and Tunisia, modeled on a scheme which underpinned the evolution of post-Soviet Europe.
"We have embraced the chance to show that America values the dignity of the street vendor in Tunisia more than the raw power of the dictator," he said.
It did not appear however that Obama would go further than rhetorical support for protesters in places like Iran and Syria.
And he appeared to hint that sometimes, America's strategic interests may take precedence.
"Not every country will follow our particular form of representative democracy, and there will be times when our short term interests do not align perfectly with our long term vision of the region," Obama said.