Mr. Obama said that he would continue to seek agreement with Iran to end a nuclear program that the West fears could produce nuclear weapons. But, he added, "we're not going to have talks forever."
Israel has grown increasingly concerned about Iran's nuclear program, dismissing Tehran's protestations that its work is peaceful. The suggestion of a limit to American patience would thus be welcomed by Israel. It might also ease, or divert, pressures on Israel to resolve its conflict with the Palestinians.
Mr. Obama, emerging from the 90-minute meeting with Mr. Netanyahu, reiterated support for a two-state Middle East solution. The Israeli leader, for his part, said that Palestinians should govern themselves but did not specifically mention a separate state.
In remarks to reporters after their Oval Office session, Mr. Netanyahu added that he was ready to open talks with Palestinians "immediately."
"We're ready to do our share, we hope the Palestinians will do their share as well," Mr. Netanyahu said. If the Palestinians recognized Israel's existence as a Jewish state and met Israeli security conditions, he said, "I think we can envision an arrangement where Palestinians and Israelis live side-by-side."
But Mr. Obama also called bluntly for an end to construction of Jewish settlements in the West Bank. "We have to make progress on settlements," he said. "Settlements have to be stopped."
The body language between the men, who had met before but not since taking office this year, seemed good. Mr. Netanyahu called Mr. Obama a "friend of Israel." And Mr. Obama said that the Israeli leader was "in a position to achieve the security objectives of Israel but also bring about historic peace, and I'm confident that he's going to seize this moment."
As for Iran, Mr. Obama said that he was keeping open "a range of steps, including much stronger international sanctions" for dealing with Iran if it proceeds with its nuclear program.
He said he hoped for progress on his diplomatic opening to Tehran by year's end but added that he saw no reason to set any artificial deadline.
The outcome of the meeting — which started a series of consultations here meant to revive Middle East peace efforts — left somewhat unclear what progress might have been made toward the two-state goal supported by the United States, Europe and others. Because other regional leaders are to follow Mr. Netanyahu here — notably the Palestinian and Egyptian presidents — both sides on Monday may have been moving with caution.
The meeting between a new American president whose views on the region are not fully known and an Israeli prime minister long reputed for his hawkish stances had been highly anticipated. Mr. Netanyahu is wary of Mr. Obama's pursuit of talks with Iran, which Israel sees as posing an existential threat; and Mr. Obama favors a two-state solution on which Mr. Netanyahu has doubts.
Earlier, a State Department spokesman, Ian C. Kelly, had declined to predict the outcome of the meeting, but said, "I wouldn't describe it as loggerheads by any stretch of the imagination."
The Obama administration hopes that fears about Iran's nuclear program will induce regional actors to overcome doubts and support an Israel-Palestinian peace plan, and Mr. Netanyahu also called for a larger role by moderate Arabs.
A regional peace would "allow the U.S. to tackle other problems, like the Iranian issue," Hussein Hassouna, the Arab League ambassador in Washington, told Bloomberg News on Monday. "We support this."
Many in the Middle East and elsewhere are still trying to divine whether the new president might break from a tradition of what some see as almost unquestioning support for Israel by American presidents. A top priority for Mr. Netanyahu was to persuade Mr. Obama to take a tougher stance against Iran.
Israeli commentators took comfort Monday from the president's comment, in a Newsweek interview posted shortly before the White House meeting, that "I've been very clear that I don't take any options off the table with respect to Iran" — a formulation traditionally understood to leave open the possibility of military attack.
Defense Minister Ehud Barak said Saturday that he expected Mr. Netanyahu to signal a significant shift and endorse the creation of a Palestinian state; but on Monday, Mr. Netanyahu's national security adviser, Uzi Arad, suggested that the Israeli leader might resist pressure to move in that direction.
Israelis have been intently parsing Mr. Obama's language for any sign that he might ultimately be supportive if Israel declared that Iranian nuclear progress left it no choice but to attack. In the Newsweek interview, Mr. Obama was asked how he would talk to Mr. Netanyahu about the possibility of Israeli military action against Iran, and whether he was keeping all options open.
"I don't take options off the table when it comes to U.S. security, period," the president said. "What I have said is that we want to offer Iran an opportunity to align itself with international norms and international rules."
He added: "Now, will it work? We don't know. And I assure you, I'm not naïve about the difficulties of a process like this. If it doesn't work, the fact that we have tried will strengthen our position in mobilizing the international community."
The United States and Israel also differ over Israeli settlement activity, particularly after Israeli settlers announced on Monday that the government was accepting bids for construction in a new Jewish community deep in the West Bank.
Palestinians wanted Mr. Obama to argue to Mr. Netanyahu that Israel is obliged under an existing peace plan, backed by the United States, to accept the two-state solution and stop work on settlements, Saeb Erekat, a longtime Palestinian negotiator, told The Associated Press.
Both the United States and the European Union have criticized the settlement activity.