President Barack Obama on Thursday urged the Israeli people to put themselves in the shoes of Palestinians and recognize their "right to self-determination, their right to justice."

In a televised speech at the Jerusalem Convention Center, Obama said there should be "two states for two peoples."

Breaking off from his prepared text, he said that he recently met with a group of young Palestinians.

"Talking to them, they weren’t that different from my daughters, they weren’t that different from your daughters or sons," he said.

"I honestly believe that if any Israeli parent sat down with these kids, they’d say, 'I want these kids to succeed, I want them to prosper, I want them to have opportunities just like my kids do,'" he added to applause.

Obama, on the second day of his first official trip to Israel, warned that "the only way for Israel to endure and thrive as a Jewish and democratic state" was through the creation of an independent Palestine.

That state had to be "viable" with real borders, he said, criticizing the building of settlements in the West Bank.

He urged ordinary Israelis to put pressure on their leaders to achieve a future in which Jews, Christians and Muslims could live in peace.

"I also know that not everyone in this hall will agree with what I have to say about peace. I recognize that there are those who are not simply skeptical about peace, but question its underlying premise, have a different vision for Israel’s future and that's a part of democracy and the discourse between our two countries," he said.

"Peace is necessary, I believe that. I believe that peace is the only path to true security. You have the opportunity to be the generation that permanently secures the Zionist dream, or you can face a growing challenge to its future," he added.

Jason Reed/ Reuters

President Barack Obama shakes hands with Israel's President Shimon Peres after Obama was presented with the Presidential Medal of Distinction, Israel's highest civilian honor, during an official state dinner in Jerusalem on Thursday.

At a state dinner in Jerusalem Thursday evening, Israel's President Shimon Peres awarded Obama with Israel’s highest honor — the Presidential Medal of Distinction — emphasizing what Peres called his "unforgettable contribution" to the security of Israel.

U.S. support for the Iron Dome missile defense system had been instrumental in saving Israeli lives, Peres said.

As Obama sat at the dais with Prime Minister Benjamin Netanyahu and his wife Sara before a room full of Israeli dignitaries, Peres called out the U.S. president's "tireless work to make Israel strong to make peace possible."

Peres said he was "convinced" the United States "will do whatever is necessary on the Iranian threat."

Obama said he was accepting the award "on behalf of the American people."

Israel must avoid 'isolation'
In his address at the convention center Obama stressed that America would always support Israel, echoing his comments Wednesday that the U.S. was Israel's "eternal" ally.

But he said peace had to be made between "peoples" and could not be achieved through military hardware alone.

"Given the frustration in the international community, Israel must reverse an undertow of isolation. And given the march of technology, the only way to truly protect the Israeli people over the long term is through the absence of war — because no wall is high enough, and no Iron Dome is strong enough and perfect enough, to stop every enemy that’s intent on doing so from inflicting harm," he added.

Obama said Israel could not be expected to negotiate with anyone "dedicated to its destruction."

But he said he believed that Israelis had a "true partner" in Palestinian President Mahmoud Abbas, along with Prime Minister Salam Fayyad. On a visit to the West Bank earlier Thursday, Obama condemned the Palestinian Hamas party, which holds sway in the Gaza Strip and is a rival to Abbas' Fatah movement.

Oliver Weiken / EPA

President Barack Obama embraces Palestinian Authority President Mahmoud Abbas upon his arrival at the presidential compound in the West Bank city of Ramallah on Thursday.

"So many young Palestinians have rejected violence. There’s an opportunity there. There’s a window," he said. "Peace is possible."

At one point in the speech, someone in the audience began heckling Obama, who peered toward the back of the hall to try to see what was happening.

"This is part of the lively debate we talked about," he said, referencing a line earlier in his speech. "This is good."

He joked about media reports that he and Prime Minister Netanyahu do not get along. It was just a "plot" between him and "my friend Bibi" to give journalists something to write about, he suggested.

Earlier, Obama met with Abbas in the West Bank.

After his helicopter touched down in Ramallah, Obama was greeted cordially by Abbas and the two hugged.

"We cannot give up on the search for peace, no matter how hard it is. ... Too much is at stake," the president said during a joint news conference.

'Misery' of Hamas
He sounded hopeful about Abbas and the Palestinian Authority and reiterated U.S. willingness to help.

"The United States is deeply committed to the creation of an independent and sovereign state of Palestine," he said, adding, "Simply, Palestinians deserve a state of their own."

When asked whether he thought a halt to further settlement activity was required before peace talks could begin in earnest, Obama demurred. 

"If the only way to even begin the conversation is that we get everything right from the outset … then we’re never going to get to the broader issue, which is how you actually structure a state of Palestine that is sovereign and contiguous," the president said.

"The core issue right now is how do we get sovereignty for the Palestinian people and ensure security for the Israeli people," he added. "If we solve those two problems, the settlement problem will be solved."

The president praised Abbas for his leadership and sharply criticized rival group Hamas for the "misery" of Palestinians in Gaza.

For his part, Abbas said he had "renewed confidence" in U.S. assistance with the peace process after meeting with Obama.

"We have conducted a good and useful round of talks," he said through an interpreter.

Abbas called for an end to Israeli construction of settlements in Palestinian territories.

He warned that continued building of the sites was causing Palestinians, particularly the younger generation, to lose hope that Israel and a sovereign Palestine could peacefully co-exist.

When young Palestinians see the settlements, he said, "they do not trust the two-state solution anymore, and this is very dangerous" for the future.

Two rockets that may have been a show of protest were fired into southern Israel close to the border with the Hamas-controlled Gaza Strip early Thursday.

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This story was originally published on Thu Mar 21, 2013 4:53 AM EDT

The U.N. General Assembly approved a resolution on Thursday giving implicit recognition to Palestinian statehood despite threats by the United States and Israel to punish the Palestinian Authority by withholding funds for the West Bank government.

The resolution, which lifts the Palestinian Authority's U.N. observer status from "entity" to "non-member state," like the Vatican possesses, easily passed the 193-nation General Assembly with 138 nations voting in favor, and nine opposed, including the United States. Forty-one countries abstained, including the United Kingdom.

Israel, the United States and the other members who opposed the resolution see it as a largely symbolic and counterproductive move by the Palestinians. The vote took place on the 65th anniversary of the assembly's adoption of resolution 181 on the partition of Palestine into Jewish and Arab states.

Palestinian President Mahmoud Abbas has led the campaign to win support for the resolution, which follows an eight-day conflict this month between Israel and Islamists in the Gaza Strip, who are pledged to Israel's destruction and oppose his efforts toward a negotiated peace.

The U.S. State Department made a last-ditch effort to get Abbas to reconsider, but the Palestinian Authority, which exercises limited self-rule in the Israeli-occupied West Bank, held firm. 

Secretary of State Hillary Clinton, speaking at the Brookings Institution on Thursday, said the U.S. believes the resolution will "do nothing to advance the peace and the two-state solution we all want to see."

She noted that while the U.S. planned to vote "no," she played down differences with key diplomatic partners in Europe, including France, which were expected to vote in favor of the resolution.

Reuters

A Palestinian man shouts slogans during a rally in the West Bank city of Ramallah on Thursday. The U.N. General Assembly overwhelmingly approved a resolution on Thursday to upgrade the Palestinian Authority's observer status at the United Nations.

"We and our European partners agree on the most fundamental issues and share a common objective — two states living side-by-side living in peace and security," Clinton said.

Susan Rice, the U.S. ambassador to the U.N., said in a statement after the vote that "the only way to establish such a Palestinian state and resolve all permanent-status issues is through the crucial, if painful, work of direct negotiations between the parties."

"The United States therefore calls upon both the parties to resume direct talks without preconditions on all the issues that divide them," Rice said.

The U.K. had committed to voting for the resolution if Abbas had shown commitment to resuming peace negotiations without preconditions. Lacking that assurance, Britain abstained from the vote.

Following the vote at the UN General Assembly the Britain's Foreign Secretary William Hague said: "We continue to believe that the prospects for a swift return to negotiations on a two state solution — the only way to create a Palestinian state on the ground — would be greater today if President Abbas had been able to give the assurances we suggested, and without which we were unable to vote in favor of the resolution.

UN Palestinian statehood vote to be a personal political victory for Abbas 

"In particular, we called on President Abbas to set out a willingness to return to negotiations without preconditions, and to signal that the Palestinians would not immediately seek action in the International Criminal Court, which would be likely to make a return to negotiations impossible.

"Nonetheless, we will redouble our efforts to restart the peace process, and will continue our strong support for President Abbas, the Palestinian Authority, and a two state solution," he said.

Despite its fierce opposition, Israel made efforts that appeared designed to prevent diplomatic isolation. In recent days, it toned down threats of retaliation in the face of wide international support for the initiative, notably among its European allies.

"The decision at the United Nations will change nothing on the ground," Israeli Prime Minister Benjamin Netanyahu said in Jerusalem. "It will not advance the establishment of a Palestinian state. It will delay it further."

But U.N. diplomats say that Israel's reaction might not be so measured if the Palestinians seek ICC action against Israel on charges of war crimes, crimes against humanity or other crimes the court would have jurisdiction over.

Granting Palestinians the title of "non-member observer state" falls short of full U.N. membership — something the Palestinians failed to achieve last year. But it does allow them access to the International Criminal Court and other international bodies, should they choose to join them.

Speaking at an annual U.N. event in support of the Palestinians, Palestinian Foreign Minister Riyad al-Maliki appealed to U.N. member states to support Thursday's U.N. resolution. He also repeated his support for peace with Israel.

"Despite diminishing hopes and the decline of the situation on the ground due to Israel violations, we remain committed to the two-state solution and our hand remains extended in peace," he said at U.N. headquarters in New York.

State Department spokeswoman Victoria Nuland reiterated U.S. warnings that the move could cause a reduction of U.S. economic support for the Palestinians. The Israelis have also warned they might take significant deductions out of monthly transfers of duties that Israel collects on the Palestinians' behalf.

Russian Deputy Foreign Minister Mikhail Bogdanov was quoted by the Interfax news agency as calling on Washington and Israel to avoid "any hasty and destructive decisions."

"Supporting the Palestinian authorities is not only in the interest of the Palestinian side, but also of Israel and the whole international community that is longing for a peaceful political settlement," he said.

The European Union, a key donor for the Palestinians, has made clear it will not curtail aid after Thursday's vote.

U.N. Secretary-General Ban Ki-moon also called for a revival of the peace process: "Israelis and Palestinians must break out of a zero-sum mentality, and embrace a peaceful path forward."

Watch the most-viewed videos on NBCNews.com 

Flag-waving Palestinians thronged the squares of the West Bank and Gaza Strip before Thursday's vote. In a rare show of unity, Abbas's Islamist rivals Hamas, who have ruled Gaza since a brief civil war in 2007, let backers of the president's Fatah movement hold demonstrations there.

Peace talks have been stalled for two years, mainly over Israeli settlements in the West Bank, which have expanded despite being deemed illegal by most of the world. There are 4.3 million Palestinians in the West Bank and Gaza.

In the draft resolution, the Palestinians have pledged to relaunch the peace process immediately following the U.N. vote.

With strong support from the developing world that makes up the majority of U.N. members, it is virtually assured of securing more than the requisite simple majority. Palestinian officials hope for more than 130 yes votes.

Abbas has focused on securing as many votes as possible from Europe, and his efforts appear to have paid off.

Going into the vote, Austria, Denmark, Norway, Finland, France, Greece, Iceland, Ireland, Italy, Luxembourg, Malta, Portugal, Spain, Sweden and Switzerland had all pledged to support the resolution. 

NBC News' Kari Huus and Reuters contributed to this report. 

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RAMALLAH, West Bank — For a fateful scene in a murder mystery, it was all a little low key.

Steel-gray skies, a modest guard of honor and a somber ceremony as Yasser Arafat’s tomb was resealed.

It had taken scientists from Russia, France and Switzerland just a few hours to gather the evidence they came for.

No need to exhume the body. Instead they took samples that they will now examine for the deadly radioactive element polonium.

Already some experts warn that their findings are almost certain to be inconclusive.

Too much time has elapsed, they caution. And even if investigators find traces of toxin, it won’t answer this question: Who administered the fatal dose?

Arafat's body exhumed; experts to investigate if he was poisoned

No matter. Almost any Palestinian you ask already has an answer: Israel is the assassin.

After all, a man who was to Palestinians the ultimate fighter for freedom was to Israel too often the odious face of terror.

And in 30 years of conflict the Israelis pursued him to Lebanon before finally cornering him in his West Bank compound, the Muqata’a.

Rebuilt from the rubble left by its destruction by Israel, it now houses the gleaming marble mausoleum that is Arafat’s final resting place.

Today it was shrouded in blue sheets to shield the scientists from view as they went about their grim business.

"The time has come to find the proof. And to bring justice. I think he deserves it, and the Palestinian people deserve it,’’ says noted Palestinian activist Mustafa Barghouti.

Mohamad Torokman / Reuters

A Palestinian security forces member walks outside the grave of Palestinian leader Yasser Arafat in the West Bank city of Ramallah, Nov. 27, 2012.

For the record, Israel enters a strenuous plea of not guilty, courtesy of Ra’anan Gissan, who in 2004 was an adviser to Israel’s then-Prime Minister Ariel Sharon.

Did Israel order the death of Arafat? I ask him.

"I can tell you, a definite, absolute no,’’ he says. "They used to say that our snipers had Arafat in their sights and the decision was not to kill him."

Palestinians: Settlers threaten West Bank's centuries-old olive harvest tradition

Today's examination was prompted by a television investigation that found polonium on samples of clothing, including Arafat's iconic kaffiya headdress, provided by his widow.

But the timing is fortuitous, even if it is, as the Palestinians on the West Bank insist, a coincidence that later this week Arafat's successor heads to the United Nations.

Mahmoud Abbas is to ask the UN General Assembly to grant his Palestinian Authority a form of recognition known as non-member observer status.

It would put the Palestinians on the same diplomatic footing as the Vatican but more crucially on open important legal route to potentially suing the Israel’s occupying forces for war crimes through international courts.

The mathematics is looking good for Abbas — good news for a leader who hasn’t had much to celebrate of late. 

His Palestinian rivals in Gaza, the militants of Hamas, have been buoyed by the short war with Israel and claim they’ve achieved more in a week than Abbas has won in nearly a decade of failed negotiation.

Win at the UN on Thursday, and Abbas has something to show for his strategy. 

Perhaps then even Yasser Arafat’s spirit might be permitted to rest a little more peacefully.

Slideshow: Yasser Arafat, in pictures

AP

See key moments and memorable scenes from Yasser Arafat's life.

Launch slideshow

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