"There was an expectation in Jerusalem that the president would repeat his previous clear expressions on the issue, including those made in Washington after his meeting with Prime Minister Benjamin Netanyahu," said the official, who asked not to be identified.

Obama said in his address at Cairo University that the nuclear showdown with Iran had reached a decisive point.

But the US leader surprised some Israeli officials by saying that Iran had the right to peaceful nuclear power if it abided by international treaties.

Israeli leaders were encouraged when Obama said after his meeting with Netanyahu in the White House on May 18 that Washington would review its dialogue with Tehran about its nuclear programme by the end of the year.

The hawkish premier said Israel maintained its right of self-defence against Iran, which it suspects of seeking to obtain an atomic bomb under cover of its civilian nuclear programme. Tehran denies the charge.

earlier related report
US lawmaker criticizes Obama speech timing
A Republican lawmaker Thursday criticized President Barack Obama's timing for his landmark speech on ties with the Muslim world, saying it should not have come on the 20th anniversary of the Tiananmen crackdown.

Representative Chris Smith, an outspoken critic of China's human rights record, said Obama's speech in Cairo threatened to diminish global pressure on Beijing to account for its crushing of pro-democracy protests.

"While I respect President Obama's outreach to Muslims in Cairo today, that event surely could have been scheduled for any other day but the 20th anniversary of the Tiananmen Square massacre," Smith told a ceremony with survivors of the crackdown.

"This solemn remembrance of the victims of mass murder at Tiananmen Square -- and the crushing of their bodies and hopes by tanks and bayonets -- should have been the White House's major event today," the New Jersey lawmaker said.

US Secretary of State Hillary Clinton on the eve of the anniversary called for China to account for how many were killed, jailed or went missing in the crackdown and urged Beijing to release political prisoners.

China's government denounced Clinton's appeal and said it had already "reached a conclusion" about the "political incident."

Chinese troops are believed to have killed hundreds or even thousands of people on the night of June 3-4, 1989 as they opened fire on student-led protests that had swelled into a mass movement in the heart of Beijing.

earlier related report
Israel hopes for Arab reconciliation after Obama speech
Israel said it hoped for reconciliation with the Arab and Muslim world but that its security was key in any peace drive in the wake of US President Barack Obama's landmark speech, which the Palestinians hailed as a good beginning.

"The Israeli government expresses its hope that President Obama's important speech in Cairo will in fact lead to a new kind of reconciliation between the Arab and Muslim world and Israel," Prime Minister Benjamin Netanyahu's office said.

"We share President Obama's hope that the American effort will herald in a new age that will bring an end to the conflict and pan-Arab recognition of Israel as the state of the Jewish people living in peace and security in the Middle East.

Israel will work toward peace "while taking into consideration its national interest, first and foremost its security."

While calling the bond between Israel and the United States "unbreakable" and slamming anti-Semitism and Holocaust denial, Obama reiterated his support for a sovereign Palestine. He called the Palestinian situation "intolerable" and said continued Jewish settlements in the West Bank had no legitimacy.

This marked the latest in a string of blunt comments from the Obama administration toward Israel, which have raised tensions between the two to levels unseen in 20 years.

The Palestinian Authority hailed Obama's speech as "clear and frank."

"It is an innovative political step and a good beginning on which one must build," said Nabil Abu Rudeina, spokesman for Palestinian president Mahmud Abbas.

The speech broke with the "preceeding partial American policy" in favour of Israel, he said. "The comments on the intolerable Palestinian situation is a message that Israel should understand well."

The Hamas movement ruling the Gaza Strip -- which Obama called on to renounce violence, recognise Israel and past peace agreements if it wanted to play a role in fulfilling Palestinian aspirations -- cautiously greeted the speech, but said it contained "contradictions."

"Hamas greets the measured tone used by President Obama, exempt of the menacing language that the previous administration has gotten us used to," Hamas spokesman Fawzi Barhum said in a statement.

"This address must be judged not on its form, but by the policies that Obama will apply on the ground to respect the freedom of people and their democratic choices and the right of the Palestinian people to its land," he said.

"It had many contradictions, all the while reflecting tangible change," Barhum told AFP.

Israeli settlers, who once again heard the new US administration call for a stop to te Jewish settlements in the occupied West Bank, slammed the address.

"He expressed positions that are contrary to our interests and the will of the voters of Israel," Danny Dayan told public radio, referring to the February 10 election that saw right-wing parties take a majority of seats in parliament.

"He wants to dictate the fate of Jerusalem and of the Temple Mount and we cannot tolerate this," he said, referring to the area in Jerusalem's Old City that Muslims know as the Noble Sanctuary, which is the holiest site in Judaism and third-holiest in Islam.

In Gaza, residents cautiously welcomed the speeck. The territory is reeling from an Israeli blockade that has prevented all but essential humanitarian goods from entering since Hamas, a group pledged to Israel's destruction, seized power in June 2007.

"It is a balanced speech and all I hope is that it will translate into action," said Khadher Affana, 50, a doctor.

"There is a change and there is a message that speaks of the suffering of the Palestinians. We hope that Israel will understand this message and will do what he asked."

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