RAMALLAH, Palestinian Territories (AP, AFP) - President Barack Obama said Thursday he is not giving up on stalled peace talks in the Mideast but that continued Israeli settlement-building in West Bank is not advancing the cause.

The president, appearing at a news conference with Palestinian Authority President Mahmoud Abbas in the West Bank, said Palestinians deserve an independent and sovereign state and an end to occupation by Israel. He said the prospect of a contiguous Palestinian state alongside a Jewish state of Israel continues to exist if negotiations would restart.

"I absolutely believe that it is still possible, but I think it is very difficult," Obama said. He also said it would be helpful if rockets weren't still being launched into Israel.

Abbas said he told the American leader that peace with Israel should not be achieved through violence, occupation, settlements, arrests or denial of refugee rights.

Obama also condemned the firing of two rockets from Gaza into southern Israel, saying the territory's Hamas rulers were responsible for stopping it.

"We saw the continuing threat from Gaza again overnight with the rockets which targeted Sderot.

"We condemn this violation of this important ceasefire that protects both Israelis and Palestinians, a violation that Hamas has a responsibility to prevent," he said of a ceasefire deal which ended eight days of bloodshed in November.