Jerusalem, Mar 22 (IANS): 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 was "counterproductive" to peace.

Obama, who is on a three-day state visit in Israel, made the appeal during a keynote speech to Israeli students, Xinhua reported.

The US president said an independent and viable Palestinian state was the only way to guarantee the peace and security of Israel and that he believed Palestinian leader Mahmoud Abbas is a "true partner" for peace with Israel.

"Israelis must recognise 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. "

While calling on the Palestinians to recognise Israel as a Jewish state, Obama said the Palestinians also have 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," Obama said it to the applauding audience.

The Israel-Palestinian conflict is one of the agendas of Obama's first visit to Israel as US president.

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.