US President Barack Obama speaks during his meeting with Israel's Prime Minister Benjamin Netanyahu at the United Nations in New York Sept 21, 2011. Netanyahu said Wednesday that direct negotiation was the only way to achieve a stable Middle East peace and the Palestinian effort to secure UN recognition of statehood "will not succeed." [Photo/Agencies]

UNITED NATIONS - US President Barack Obama told Israeli Prime Minister Benjamin Netanyahu on Wednesday that peace cannot be imposed but has to be negotiated between the Israelis and the Palestinians.

"Peace cannot be imposed on the parties," Obama said during their meeting on the sidelines of the UN General Assembly. "It's going to have to be negotiated. The ultimate goal of all of us is two states side by side living in peace."

The Obama administration is making last-ditch efforts to stop the Palestinians' bid for statehood at the UN Security Council, calling the unilateral move "unproductive," while Israel said it would bring about grave consequences. The US has threatened to veto any Palestinian move.

In his earlier address to the General Assembly, Obama said the Palestinians deserve "a state of their own," but the path lies in negotiations.

Netanyahu praised Obama's efforts to block the statehood bid as a "badge of honor," and thanked the president for "standing with Israel and supporting peace," the White House said.

"We both agree that Palestinians and Israelis should sit down and negotiate. This is the only way to get a stable and durable peace," Netanyahu said.

He said the attempt to "shortcut" this process and get membership at the UN will not succeed. He also expressed hope that others will follow in Obama's path.

Reporters noticed that Obama leaned into Netanyahu as he spoke, but the tone and body language of the two men was reserved.

The meeting was the first between the two leaders since May, when Netanyahu sparred with Obama at his Oval Office over his suggestion that Israel and the Palestinians restart negotiations on the basis of the 1967 boundaries with mutually agreed swaps.

Obama is scheduled to meet with Palestinian President Mahmoud Abbas on Wednesday afternoon.