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Pablo Martinez Monsivais, Associated Press
Israeli President Shimon Peres speaks to members of the media outside White House in Washington, Tuesday, April 5, 2011, following his meeting with President Barack Obama.

WASHINGTON — As unrest sweeps the Middle East, it's more urgent than ever to make peace between Israel and the Palestinians, President Barack Obama said Tuesday after meeting with Israeli President Shimon Peres.

The meeting occurred even as the U.S. condemned the announcement that new Israeli apartment buildings have been approved for a contested part of Jerusalem, underscoring the grim outlook for peace talks. Palestinians refuse to restart negotiations unless Israel stops building housing in occupied territory that the Palestinians claim for their future state.

Obama didn't speak about the housing announcement when he addressed reporters after his Oval Office meeting with Peres, Israel's ceremonial president and longtime advocate for peace. Obama said the two discussed developments in the Middle East, where uprisings have toppled longtime rulers, including key U.S. and Israeli ally Hosni Mubarak of Egypt.

"He and I both share a belief that this is both a challenge and an opportunity," Obama said, "that with the winds of change blowing through the Arab world, it's more urgent than ever that we try to seize the opportunity to create a peaceful solution between the Palestinians and the Israelis."

Peres, too, said that it was necessary to return to peace talks.

"We don't want to be in controversy with the Muslim world. We want to make friends with them. We want to have peace," Peres told reporters outside the White House.

Neither leader had any announcement to make about the prospect for a resumption of talks, which collapsed in 2008, revived briefly in September 2010 under pressure from the Obama administration, and fell apart again when Israel ended a moratorium on settlement construction.

The Palestinian Authority, the Western-backed government in the West Bank, has largely resisted speaking to Israeli Prime Minister Benjamin Netanyahu's hard-line government, which has rejected a freeze of settlement construction. Netanyahu is expected to be in Washington next month.

Israel, under increasing international pressure, is bracing for an expected Palestinian effort in September to gain recognition for full statehood on all the lands it seeks.

Obama left it to the State Department to condemn Monday's announcement that Jerusalem officials were giving preliminary approval for 942 apartments in a Jewish development in the city's contested eastern sector. Several times,Israelis have announced new housing developments at awkward times for the U.S., most notably last year when a building project in east Jerusalem was announced during a visit to Israel by Vice President Joe Biden.

"We're deeply concerned about the announcement of the approval for these units," said State Department spokesman Mark Toner. "We believe that through good-faith direct negotiations the parties should mutually agree on an outcome that realizes the aspirations of both parties. Ultimately, a lack of resolution to this conflict harms Israel, harms the Palestinians and harms the interests of the United States and the international community."