On Libya, President Obama said "time is working against" Colonel Moammar Gadhafi, adding that when he "inevitably leaves or is forced from power" a transition to a democratic Libya can proceed.

Aid to region

To help democracy take root in countries like Egypt and Tunisia, President Obama announced new initiatives to support economic reform, modernization and investment.

These include debt relief for Egypt, and a U.S. request to the World Bank and IMF for a plan to stabilize and modernize both economies.

Obama linked the wave of upheaval across the region with un-met economic needs. "After all, politics alone has not put protesters into the streets. The tipping point for so many people is the more constant concern of putting food on the table and providing for a family. Too many in the region wake up with few expectations other than making it through the day, and perhaps the hope that their luck will change," he said.

Israel-Palestinian

Saying the Israeli-Palestinian conflict has cast a shadow over the Middle East for decades, President Obama rejected suggestions that sweeping changes in the region make it impossible to break the current impasse.

"I disagree," he said. "At a time when the people of the Middle East and North Africa are casting off the burdens of the past, the drive for a lasting peace that ends the conflict and resolves all claims is more urgent than ever."