UNITED NATIONS (Reuters) - President Barack Obama sought to ease doubts about his leadership on the world stage on Wednesday as he confronted a looming diplomatic crisis in the Middle East and hailed popular Arab revolts.

Obama attempted to reassert his credentials as a world statesman in an address inside the cavernous U.N. General Assembly hall even as he grappled with high unemployment and low poll numbers at home that threaten his re-election bid.

His high-profile foray into foreign policy challenges was dominated by efforts to head off a Palestinian plan to seek U.N. recognition of statehood, a move that could erode U.S. global standing and further isolate close ally Israel.

Obama’s last-ditch diplomatic drive won praise from Israel, which will rely on Washington to block the Palestinian U.N. membership bid in the Security Council, but the Palestinians vowed they would not be deterred.

The president -- whose earlier peace efforts accomplished little -- insisted that Middle East peace “will not come through statements and resolutions” at the world body and put the onus on the two sides to break a yearlong impasse and return to peace talks.

“There is no short cut to the end of a conflict that has endured for decades,” Obama told an annual gathering of world leaders in New York, though he offered no new prescriptions for relaunching negotiations.

Obama finds himself in the quandary of opposing a move toward Palestinian self-determination even as he hailed Arab democracy movements that have shaken -- or toppled -- authoritarian rulers in Tunisia, Egypt, Syria and Libya.

A senior Palestinian official said Obama’s stance violated the spirit of the “Arab spring,” and it seemed the best the president could hope for was to slow down the Palestinian statehood bid or contain the diplomatic damage it causes.

This comes as Obama’s outreach to the Muslim world has already been faltering and further underscores the stark new limits of U.S. influence amid Middle East upheaval.

Obama attempted to strike a delicate balance from the U.N. podium. He sought to reassure Palestinians he was not abandoning his pledge to help them end Israeli occupation and achieve eventual statehood while also placating any Israeli concerns about Washington’s commitment to their security.

He was considered unlikely to lean too heavily on Israeli Prime Minister Benjamin Netanyahu for concessions to the Palestinians, mindful that he cannot afford to alienate Israel’s broad base of support among American voters as he seeks re-election in 2012.

REPUBLICAN CRITICISM

Ileana Ros-Lehtinen, Republican head of the House of Representatives’ Foreign Affairs Committee, said Obama was “slow to respond to the dangerous Palestinian statehood scheme” and that he did take a strong enough stand in favor of Israel.

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Members of the General Assembly, where pro-Palestinian sentiment is high and Israel has often felt ostracized, listened politely but without enthusiasm to Obama’s speech.

Even as the looming U.N. showdown overshadowed Obama’s agenda, he sought to rally fellow leaders for concerted action to spur the sagging global economy. He also kept pressure on the Europeans over the euro zone debt crisis.

Obama held a marathon round of bilateral talks with new Japanese Prime Minister Yoshihiko Noda, British Prime Minister David Cameron and French President Nicolas Sarkozy.

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“We stand with our European allies as they reshape their institutions and address their own fiscal challenge,” Obama said in his speech.

For their part, other leaders are concerned about political dysfunction in Washington underscored by a bipartisan brawl over debt and deficits that led to a downgrade of America’s top-notch credit rating.

Obama’s vision of multilateral diplomacy helped him earn a Nobel Peace Prize after only 11 months in office and made him wildly popular in Europe and elsewhere. He promised a dramatic shift from what was widely perceived as the go-it-alone “cowboy diplomacy” of predecessor George W. Bush.

While many world leaders have welcomed the change in U.S. tone, the euphoria over Obama’s collaborative approach has worn off, and questions about global economic concerns have overshadowed “soft power” issues he previously espoused.

Obama’s annual turn at the U.N. podium came at a time when he is increasingly preoccupied with Americans’ domestic concerns -- a stagnant economy and high unemployment -- considered critical to his 2012 re-election chances.

Foreign policy has slipped down his policy agenda, a trend not lost on fellow world leaders trying to fathom how much of a role Obama intends to play in world affairs.

A key example was Obama’s decision to keep U.S. forces mostly in a support role in the NATO bombing campaign that helped oust Muammar Gaddafi.

Obama has drawn criticism for what has been seen as a slow and uneven response to the “Arab spring” revolts engulfing friends and foes alike, and Republicans say his “leading from behind” approach undermines U.S. global prestige.

Obama also used his speech to laud the U.S. killing of Osama bin Laden, urge further sanctions against Syrian leader Bashar al-Assad and tout his efforts to wind down wars in Iraq and Afghanistan. He also called on Iran and North Korea to meet their nuclear obligations -- twin standoffs that have eluded his efforts at resolution.