Updated at 11:05 a.m. ET
UNITED NATIONS - President Obama declared Wednesday that there could be no short cut to peace between Israel and the Palestinians, as he sought to head off a looming diplomatic crisis for the Middle East and U.S. policy there.
"Peace will not come through statements and resolutions at the U.N. if it were that easy, it would have been accomplished by now," the president said. "Ultimately, it is Israelis and Palestinians who must live side by side. Ultimately, it is Israelis and Palestinians not us who must reach agreement on the issues that divide them."
But in the speech before the U.N. General Assembly, Mr. Obama stopped short of directly calling on the Palestinians to drop their plan to seek statehood recognition from the U.N. Security Council. U.S. officials were working furiously behind the scenes to persuade the Palestinians. With the limits of U.S. influence on the moribund peace process never more clear, Mr. Obama had no new demands for the Israelis, either, beyond saying that both sides deserved their own state and security.
"Peace depends upon compromise among peoples who must live together long after our speeches are over, and our votes have been counted," Mr. Obama said.
"That is the path to a Palestinian state."
The White House's inability to dissuade the Palestinians from their bid for statehood is doubly embarrassing for the president because of the vision that he laid out at the United Nations last year, CBS News correspondent Bill Plante reports.
"When we gather back here next year, we can have an agreement that will lead to a new member of the United Nations, an independent, sovereign state of Palestine living in peace with Israel," Mr. Obama told the world body in 2010.
But a year later, the president's vision of Israel and Palestine, living side-by-side in peace, is still just a dream, and the administration says that's not his fault, Plante reports.
"The point that the president will make is at the end of the day, peace is going to have to be made between the parties, that it can't be imposed from the outside, that it can't be accomplished through actions at the United Nations," White House deputy national security adviser Ben Rhodes said.
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"The reality is there's no short cut to statehood," Rice told "Early Show" co-anchor Erica Hill. "It's not going to happen at the United Nations unless and until there's a negotiated settlement between the two parties so that the borders are sorted out, security is sorted out, the capital is sorted out, refugees are sorted out, water issues, all these critical things.
"So, our view is not that the Palestinians shouldn't have a state; indeed, they should, living side-by-side in peace and security with the Jewish state of Israel," Rice told Hill, "but that can only happen through negotiations."
U.S. officials conceded they cannot stop Abbas from officially launching his case for the Security Council's approval of the statehood effort, but also make the case for the Palestinian leader to essentially drop the move for statehood recognition after delivering his letter of intent to the U.N.
Abbas was expected to deliver a formal request for statehood recognition on Friday when he speaks to the General Assembly. But it could take weeks or months for the U.N. to act on the Palestinians' request.
And while Mr. Obama will formally ask Abbas not to pursue the statehood bid, the mission is actually directed at containing the fallout by urging the Palestinian leader not to push for an actual vote in the Council, where the U.S. has promised a veto. A delay would give international peacemakers time to produce a statement that would be the basis for resumed Israeli-Palestinian negotiations.
Mr. Obama will also meet with Israeli Prime Minister Benjamin Netanyahu, who arrived in New York early on Wednesday.
Nicolas Sarkozy, the French leader, met with Abbas on Tuesday, and diplomats close to the talks said Sarkozy told the Palestinian leader that he would outline a proposal for the Palestinians to seek upgraded status with the General Assembly, where no member holds a veto. The resolution would be designed to make Palestine a nonmember observer state, raising its status from that of permanent observer. The diplomats spoke on condition of anonymity to discuss private talks.
In carefully orchestrated demonstrations, thousands of flag-waving Palestinians rallied Wednesday in towns across the West Bank to show support for their president's bid for U.N. recognition.
Civil servants and schoolchildren were given time off to participate. Despite the largely low-key mood, a new poll indicated an overwhelming majority supports Abbas' quest for U.N. recognition of a state in the West Bank, Gaza and east Jerusalem, the areas Israel captured in the 1967 Mideast War.
A British minister insisted Tuesday that U.K. Prime Minister David Cameron, Foreign Secretary William Hague and Deputy Prime Minister Nick Clegg would make a final decision on how to respond to the Palestinian's demands.
"You don't show your hand at the beginning of the negotiations when you may wish to keep your hand back for later in the negotiations," junior Foreign Office minister Jeremy Browne said.
"I think we should have some confidence that the British government is taking a studied and considered approach," Browne told a rally of his Liberal Democrat party in Birmingham, central England.
With Abbas determined to seek membership rather than upgraded status, the Palestinian delegation relentlessly knocked on diplomatic doors at the U.N. trying to sell their case for international recognition.
Netanyahu issued dire warnings against hasty action as he boarded his jet for New York. Mr. Obama plans to meet with Netanyahu as well as Abbas.
The issue of the unilateral Palestinian declaration of statehood, born of decades of frustration and failed negotiations with Israel, has consumed diplomats who are gathering for Wednesday's opening of the annual U.N. General Assembly ministerial meeting.
Abbas has rejected all attempts to steer him away from formally submitting an application for full U.N. membership.
For his part, Netanyahu, in a meeting with members of his hardline Likud Party before leaving Jerusalem late Tuesday, vowed to speak "the truth" in New York "the truth of a people that wants peace, a nation that was attacked time after time and that is being attacked time after time by those that don't oppose our policies but rather our very existence."