JERUSALEM - US President Barack Obama called on the Israeli government Thursday to stop building settlements in the West Bank and East Jerusalem, saying continued settlement activity is "counterproductive" to peace. ?

Obama, who is in Israel on a three-day visit, was delivering a keynote speech to Israeli students which was nationally televised.

US President Barack Obama acknowledges the audience?after addressing Israeli students at the International Convention Center in Jerusalem March 21, 2013. [Photo/Agencies]

In the emotional speech, Obama said an independent and viable Palestinian state is the only way to guarantee the peace and security of Israel and he believed Palestinian leader Mahmoud Abbas is a "true partner" for peace with Israel.

"Israelis must recognize that continued settlement activity is counterproductive to the cause of peace, and that an independent Palestine must be viable, that real borders will have to be drawn," he said.

Obama also expressed his objection to unilateral steps in solving the Israel-Palestinian conflict, saying that "The US will oppose unilateral steps that attempt to bypass negotiations in the UN (United Nations)." He was referring to the Palestinians' bid to win recognition of their state by the United Nations.

While calling on the Palestinians to recognize Israel as a Jewish state, Obama said the Palestinians has a right to self- determination.

"It is not just when settler violence against Palestinians goes unpunished... it is not right to prevent Palestinians from farming their lands or restrict Palestinian students from moving around their lands or displacing Palestinian families from their homes; neither occupation nor expulsion is the answer; and just as Israel has built a state in their own land, the Palestinians have a right to be a free people in their own land," he said to the applauding audience.

The Israel-Palestinian conflict is one of the main topics on the agenda of Obama's first visit to Israel as president of the United States. He discussed the stalled peace talks with Israeli Prime Minister Benjamin Netanyahu at a meeting Wednesday and with Palestinian President Abbas Thursday in Ramallah, the West Bank.

The Israel-Palestinian peace talks have stalled since 2010 after the Israeli government led by then prime minister Netanyahu refused to extend a freeze on the settlement activity in the West Bank and East Jerusalem, where the Palestinians hope to build their own state.

To lower expectations for his ongoing tour, Obama Wednesday told reporters that he would not make any major announcement during his stay in Israel. US Secretary of State John Kerry, who is accompanying Obama in the trip, will reportedly come to Israel to meet with Netanyahu on follow-up actions on the peace process after Obama leaves Jordan for home Saturday.