Washington (AP) - President Barack Obama called on Wednesday for sharply limiting Israel's blockade of the Gaza Strip in the wake of the botched Israeli naval raid that's straining U.S. and Israeli relations with allies around the world, and the White House announced a $400 million aid package for Gaza and the West Bank.
"The situation in Gaza is unsustainable," Obama said as he met with Palestinian President Mahmoud Abbas in the Oval Office. He said the attention of the world is on the problem because of the "tragedy" of the Israeli raid that killed nine people trying to bring in supplies.
Obama called for narrowly tailoring Israel's broad blockade on goods entering the Gaza Strip so that arms are kept out, but not items needed for the Palestinians' daily life and economic development.
"The key here is making sure that Israel's security needs are met but that the needs of people in Gaza are also met," said Obama.
"So if we can get a new conceptual framework ... it seems to me that we should be able to take what has been a tragedy and turn it into an opportunity to create a situation where lives in Gaza are actually, directly improved."
The approach marked a shift although it stopped well short of meeting international calls for an end to the 3-year-old blockade, which Israel says is needed to keep arms away from the militant Hamas movement that controls Gaza. Critics say the blockade is ineffective and causes undue suffering. Obama said the U.S. would discuss the new approach with European leaders, Egypt, Israel and the Palestinian Authority.
Abbas welcomed the $400 million aid package, which will go for things like creating jobs and improving access to drinking water, but called for going farther on the blockade.
"We also see the need to lift the Israeli siege of the Palestinian people, the need to open all the crossings and the need to let building material and humanitarian material and all the necessities go into the Palestinian people," said Abbas, whose actual influence over Gaza is slight, since his forces were routed when Hamas took over the area in 2007. He and his more moderate Fatah movement lead the West Bank, the other Palestinian territory.
Israel's ambassador to the U.S., Michael Oren, said Israel was open to suggestions that would address the needs of the Palestinian people along with Israel's security requirements, but he defended the blockade as "essential for not only Israel's security, Egypt's security, but it's essential for the peace process."
Oren bridled at the notion of letting through goods such as building materials.
"We know that Hamas is going to take these materials and not use them to build schools, they're going to use them to build military bunkers. So we are reluctant to let those things through," Oren said in an interview with The Associated Press.
Wednesday's meeting between Obama and Abbas came as Israel announced it would allow potato chips, cookies, spices and other previously banned food items into the Gaza Strip, a step Oren said was meant in a spirit of cooperation. Critics denounced the move as insignificant, and a Hamas spokesman, Sami Abu Zuhri, said the gesture was not worth commenting on.
"Yes, we have allowed some chocolate and other snacks through today, but Hamas has rejected them," Oren said. "They rejected our chocolate."
It's been a little more than a week since Israel's deadly May 31 raid on a flotilla hoping to break the blockade on Gaza. Nine men in the flotilla were killed, including eight Turks and a Turkish American. Israel says its soldiers opened fire only after being attacked while the flotilla activists accuse Israel of using unnecessary violence.
Israeli Prime Minister Benjamin Netanyahu had been scheduled to visit the White House June 1 but canceled the visit to deal with the crisis. His visit is being rescheduled, and White House Press Secretary Robert Gibbs said Wednesday it could happen by the end of this month.
The Abbas visit, scheduled before the flotilla raid, had been expected to focus on peace talks between the Israelis and Palestinians, now proceeding with U.S. envoy George Mitchell shuttling between the two parties. The eventual goal is to move to direct talks.
Despite the uproar over the flotilla raid, Obama said he anticipated significant progress could be made, if both sides try to ensure a conducive environment. For the Israelis, Obama said, that means curbing settlement activity and recognizing progress on security on the part of the Palestinians.
"On the Palestinian side, I was very frank with President Abbas that we have to continue to make more progress on both security as well as incitement issues," Obama said.
Abbas responded to that when he spoke.
"I say in front of you, Mr. President, that we have nothing to do with incitement against Israel, and we're not doing that," Abbas said. "What we care about is to live in coexistence with Israel in order to bring about the independent Palestinian state that will live side by side with Israel in peace and stability."
A State Department spokesman, P.J. Crowley, said the $400 million aid package represented specific allocations of money that had already been budgeted for the Palestinians, some of it fulfilling a $900 million commitment Secretary of State Hillary Rodham Clinton made last year. Projects announced Wednesday included $240 million for mortgage assistance in the West Bank and $10 million to build five new schools in Gaza.
Associated Press writers Beth Fouhy in New York and Darlene Superville and Tom Raum in Washington contributed to this report.
President Barack Obama on Wednesday called for sharply limiting Israel's blockade of the Gaza Strip in the wake of the botched Israeli naval raid that's straining U.S. and Israeli relations with allies around the world.