OCCUPIED JERUSALEM: U.S. President Barack Obama demanded Thursday that foreign governments brand Hezbollah a “terrorist organization,” slamming the group for attacks on Israelis.

On the second day of his regional visit, his first to Israel as president, Obama also appealed directly to the Israeli people to put themselves in the shoes of stateless Palestinians and recognize that Jewish settlement activity in occupied territory hurts prospects for peace.

“Every country that values justice should call Hezbollah what it truly is – a terrorist organization,” Obama said in a major speech in Israel, in remarks apparently aimed at the European Union, which has declined to put the group on a list of terrorist movements.

The U.S., which, along with Canada blacklists the Lebanese party as a terrorist organization, has blamed Hezbollah for a bus bombing last July in Bulgaria, in which five Israeli tourists and the local driver were killed.

Bulgarian authorities back this claim, but have produced no evidence to support it. Hezbollah denies involvement in the attack.

Speaking to an audience of Israeli students, Obama added, “the world cannot tolerate an organization that murders innocent civilians, stockpiles rockets to shoot at cities, and supports the massacre of men, women and children in Syria.”

He went on to say that Hezbollah’s ally, “the Assad regime – has stockpiles of chemical weapons,” and that this heightened the urgency to blacklist the Lebanese party.

On the future of Israel and Palestine, Obama acknowledged Israel’s security concerns in a region destabilized by the West’s nuclear standoff with Iran and the civil war in Syria.

But he urged Israel’s younger generation to demand that their politicians take risks for peace in an address interrupted frequently by applause, including a standing ovation for the president during a brief outburst by a heckler.

“You must create the change that you want to see,” he told his young audience.

Obama said only peace could bring true security, but he did not offer any new ideas on how to revive Israeli-Palestinian peace negotiations, stalled since 2010.

“Given the demographics west of the Jordan River, the only way for Israel to endure and thrive as a Jewish and democratic state is through the realization of an independent and viable Palestine,” he said.

It was a clear warning that Israel’s continued hold over the West Bank, territory captured along with the Gaza Strip and East Jerusalem in the 1967 war, would ultimately lead to an Arab majority in land controlled by Israel.

“Israelis must recognize 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,” Obama said, stopping short of calling for a construction freeze.

“Put yourself in their [Palestinians’] shoes. Look at the world through their eyes,” he said. “It is not fair that a Palestinian child cannot grow up in a state of her own, and lives with the presence of a foreign army that controls the movements of her parents every single day.”

Obama has received an effusive welcome in Israel since his arrival Wednesday, hoping to reset his often troubled relationship with Israeli Prime Minister Benjamin Netanyahu.

“America will do what we must to prevent a nuclear Iran,” he told his enthusiastic audience, reinforcing a main theme of his visit to Israel and adding that Washington and its allies still thought there was time for a diplomatic solution.

Sprinkling in Hebrew words meaning “you are not alone,” Obama said: “Today, I want to tell you – particularly the young people – that so long as there is a United States of America, ‘ahtem lo levad.’”

In a brief statement after Obama’s speech, Netanyahu thanked him for “his unconditional support for the state of Israel.”

But in the West Bank city of Ramallah, which Obama visited before his Jerusalem speech, the mood was tinged with disappointment. Meeting Palestinian President Mahmoud Abbas for three hours, Obama pressed the Western-backed leader to drop his demand for a settlement freeze before peace talks can resume. The core issue now, Obama said at a news conference with Abbas, was how to achieve sovereignty for Palestinians and security for Israelis.

“That’s not to say settlements are important. That’s to say if we solve those problems, the settlement issue will be resolved,” Obama said.

Obama said his new secretary of state, John Kerry, would spend a significant amount of time and energy trying to narrow differences between the two sides as the United States seeks to move them back to the negotiating table.

A U.S. official said Kerry would return to Israel for talks after accompanying Obama to Jordan Friday and Saturday.

As a reminder of the ever-present risks in the region, Iranian state television Thursday quoted Supreme Leader Ayatollah Ali Khamenei as saying Tehran would raze Tel Aviv and the city of Haifa if Israel carried out veiled threats to attack Iran.

And Palestinians in the Gaza Strip fired two rockets into Sderot, a southern town that Obama visited when running for president in 2008. Police said no one was hurt.

Majles Shoura al-Mujahedeen claimed responsibility.