Obama's Middle Class Tax Cut May Not Survive Budget

The president was asked about his pledge to work for peace between Israel and Palestinians and whether he believes the realities of the situation -- with the emergence of the new conservative Israeli government -- have made that a harder quest.

"It's not easier than it was, but I think it's just as necessary. We don't yet know what the Israeli government is going to look like. And we don't yet know what the future shape of Palestinian leadership is going to be comprised of. What we do know is this -- that the status quo is unsustainable," he said.

The president added that it is critical to remain committed to a two-state solution where Israelis and Palestinians can live side by side.

"I'm a big believer in persistence," he said.

He applied this to the banks, lobbyists, pork-barrel projects and Iran -- taking some liberties with what his critics said.

"I think when it comes to the banking system, you know, it was just a few days ago or weeks ago where people were certain that [Treasury] Secretary [Tim] Geithner couldn't deliver a plan. Today, the headlines all look like, well, all right, there's a plan. And I'm sure there'll be more criticism and we'll have to make more adjustments, but we're moving in the right direction," he said.

"When it comes to Iran, you know, we did a video sending a message to the Iranian people and the leadership of the Islamic Republic of Iran. And some people said, 'Well, they did not immediately say they were eliminating nuclear weapons and stop funding terrorism.' Well, we didn't expect that. We expect that we're going to make steady progress on this front."

Obama's 'Dialogue With the American People'

The administration has shown a willingness to take the president out of Washington and have him speak directly to the American public, an apparent effort to maintain control of its economic message.

Last week, Obama traveled to California to participate in two town hall meetings.

While on the West Coast, he dropped by "The Tonight Show With Jay Leno," where he pitched his economic plans, talked about AIG and gave a glimpse of his family's new life in the White House. Obama also sat down in the Oval Office for an interview with "60 Minutes."

White House press secretary Robert Gibbs noted Monday that Obama's recent television appearances and travel allow him to "address directly with the American people the challenges that the country faces and the choices that he's working on with Congress to -- to put our economy back on track and put the nation back on firmer footing."

Obama used his first presidential news conference Feb. 9 to urge Congress to pass the stimulus plan and issued the harsh warning that a failure to act would worsen the economic crisis, calling it "not your ordinary, run-of-the-mill recession."

Nearly two months later, he has signed the stimulus legislation, has unveiled his plan to help homeowners, has rolled out a program for small-business loans and has provided a more detailed plan for bailing out banks of those toxic assets -- all key elements of his overall economic strategy that he pointed to Tuesday night.

ABC News' Huma Khan, Sunlen Miller, Martha Raddatz and Peyton Craighill contributed to this report.

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