Israeli Prime Minister Benjamin Netanyahu swiftly rejected President Obama's call Thursday for Israel to pull back to the borders that existed before the 1967 Six-Day War, calling those lines militarily "indefensible."

Obama, in a sweeping address tackling the uprisings in the Middle East and the stalled peace process, stunned Washington and Jerusalem by endorsing Palestinians' demand for their own state based on the pre-1967 borders. The break with longstanding U.S. policy appeared to immediately aggravate the Israelis, who want the borders of any future Palestinian state determined through negotiations.

In a statement released late Thursday, Netanyahu said such a withdrawal would jeopardize Israel's security and leave major West Bank settlements outside Israeli borders.

"Israel appreciates President Obama's commitment to peace," the statement said. "Israel believes that for peace to endure between Israelis and Palestinians, the viability of a Palestinian state cannot come at the expense of the viability of the one and only Jewish state. That is why Prime Minister Netanyahu expects to hear a reaffirmation from President Obama of U.S. commitments made to Israel in 2004. ... Among other things, those commitments relate to Israel not having to withdraw to the 1967 lines."

The U.S. had previously endorsed the concept of a Palestinian state, but not the demand for permanent pre-1967 borders, with mutually agreed land swaps. The declaration comes ahead of a meeting in Washington between Obama and Netanyahu.

"The status quo is unsustainable," Obama said. "A lasting peace will involve two states for two peoples."

Though the shift will likely create tension as the president meets with Netanyahu and heads next to address Israel advocacy group AIPAC this weekend, Obama sought to assure that the United States' commitment to Israeli security is "unshakable."

He said Israeli's right to defend itself will remain paramount, and suggested the recent unity agreement between Fatah and Hamas, which the U.S. deems a terrorist group, is problematic for negotiations. Though Israel occupied East Jerusalem, along with the West Bank and Gaza Strip, in the 1967 Six Day War, Obama said Thursday that the "future of Jerusalem" remains to be worked out, as does the fate of Palestinian refugees.

He also publicly rejected attempts by the Palestinians to gain recognition for their own state before the United Nations. "Symbolic actions to isolate Israel at the United Nations in September won't create an independent state," Obama said.

The border announcement, which came toward the end of the president's 50-minute speech, was arguably the most significant statement in an address otherwise devoted to underscoring U.S. support for the uprisings in the Middle East and North Africa. Speaking at the State Department, the president sought to align the U.S. with the ambitions of protesters pushing for economic and political reform, while warning heads of state who resist this wave that the U.S. is losing patience.

"We cannot hesitate to stand squarely on the side of those who are reaching for their rights, knowing that their success will bring about a world that is more peaceful, more stable, and more just," he said.

Obama, in his strongest words to date, offered an ultimatum to Syrian President Bashar Assad. "President Assad now has a choice. He can lead that transition or get out of the way," Obama said.

He said Assad's regime, which has killed hundreds in an effort to quell the unrest in Syria, must stop shooting and arresting its people.

Obama also called Al Qaeda and Usama bin Laden, who was killed by U.S. forces in Pakistan, a "dead end," suggesting the push for reform will represent the future of the region. He sought to connect the death of bin Laden to the wave of protests, arguing that anti-western rhetoric and attacks are losing their audience. "The slaughter of innocents did not answer their cry for a better life," he said.

Rather, Obama said: "A new generation has emerged and their voices tell us that change cannot be denied."

The president is taking a carrot-and-stick approach as the Arab Spring turns to summer and protesters' demands across the region are met with repression.

After sending U.S. forces into Libya two months ago to halt strongman Muammar al-Qaddafi's advances against his people, the Obama administration sent a message Wednesday to Assad by slapping him and top officials in Damascus with financial sanctions over his regime's brutal crackdown.

Obama, in his speech Thursday, addressed the standoff in these two countries, staunchly defending U.S. military involvement in Libya. But he also offered new levels of support to Egypt and Tunisia, countries where demonstrations ousted entrenched leaders and which the administration is holding up as a "beacon" in the region, according to one official.

He outlined specific dollar support for Egypt, where the nation's tourism-fueled economy has fallen into a slump in the wake of the upheaval, in turn increasing the country's projected deficit. Obama said Thursday the U.S. would forgive roughly $1 billion in debt owed by Egypt to free up money for job-creation efforts there. Plus he plans to guarantee up to $1 billion in loans for Egypt through the Overseas Private Investment Corp., a U.S. government institution that mobilizes private capital.

Obama is pushing other steps to bolster loans, trade and international support in Egypt and in Tunisia. Protesters in Bahrain, Yemen, Syria and other nations have endured brutal setbacks. He said the changes in the region mark a "new chapter" for U.S. diplomacy and argued that America has an important role to play.

A new poll out of the Pew Research Center, though, found that the shifting political sands in the Middle East have not generally led to an improvement in the U.S. image in the region.

The Associated Press contributed to this report.