Read the full transcript of the speech here, full video below...
CAIRO - Quoting from the Quran for emphasis, President Barack Obama called for a "new beginning between the United States and Muslims" Thursday and said together, they could confront violent extremism across the globe and advance the timeless search for peace in the Middle East.
"This cycle of suspicion and discord must end," Obama said in a widely anticipated speech in one of the world's largest Muslim countries, an address designed to reframe relations after the terrorist attacks of Sept. 11, 2001, and the U.S.-led war in Iraq.
The White House said Obama's speech contained no new policy proposals on the Middle East. He said American ties with Israel are unbreakable, yet issued a firm, evenhanded call to the Jewish state and Palestinians alike to live up to their international obligations.
In a gesture to the Islamic world, Obama conceded at the beginning of his remarks that tension "has been fed by colonialism that denied rights and opportunities to many Muslims, and a Cold War in which Muslim-majority countries were often treated as proxies without regard to their own aspirations."
"And I consider it part of my responsibility as president of the United States to fight against negative stereotypes of Islam wherever they appear," said the president, who recalled hearing prayer calls of "azaan" at dawn and dusk while living in Indonesia as a boy.
At the same time, he said the same principle must apply in reverse. "Just as Muslims do not fit a crude stereotype, America is not the crude stereotype of a self-interested empire."
Notably, Obama made an emotional plea for the right of Palestinians to live in dignity in an independent state of their own. He even used the term "Palestine," in a break from standard references to a future Palestinian state.
Obama also became the first U.S. president to admit the U.S. role in the 1953 CIA-led coup of Iran's elected prime minister Mohammed Mossadegh, the Washington Times reports. "In the middle of the Cold War, the United States played a role in the overthrow of a democratically-elected Iranian government," he said, alluding to the coup.
The speech was the longest of his presidency thus far, clocking in at 55 minutes. His speech was interrupted by applause over a dozen times.
Obama's remarks were televised on all radio and television stations in Israel, and with Arabic voice-over translations by Arab satellite stations Al-Arabiya and Al-Jazeera, Egyptian TV and Al-Manar, an outlet for the militant group Hezbollah. The speech was not broadcast in Iran, where the goverment jammed signals to block satellite owners from watching.
The president drew a somewhat positive response from corners of the world not given to complimenting the United States.
"There is a change between the speech of President Obama and previous speeches made by George Bush," said Fawzi Barhoum, a Hamas spokesman in Gaza. But he complained that Obama did not specifically note the suffering in Gaza following the three-week Israeli incursion earlier this year and did not apologize for U.S. military attacks in Iraq and Afghanistan.
In Iran, Mohammad Ali Abtahi, a cleric who was vice president under reformist President Mohammad Khatami, called the speech "compensation to hostile environment which was created during President Bush."
"This can be an initial step for removing misconceptions between world of Islam and the West," he said.
Obama spoke at Cairo University after meeting with Egyptian President Hosni Mubarak on the second stop of a four-nation trip to the Middle East and Europe.
The speech was the centerpiece of his journey, and while its tone was striking, the president also covered the Middle East peace process, Iran, the wars in Afghanistan and Iraq and the violent struggle waged by al-Qaida.
Obama arrived in the Middle East on Wednesday, greeted by a new and threatening message from al-Qaida's leader, Osama bin Laden. In an audio recording, the terrorist leader said the president inflamed the Muslim world by ordering Pakistan to crack down on militants in the Swat Valley and block Islamic law there.
But Obama said the actions of violent extremist Muslims are "irreconcilable with the rights of human beings," and quoted the Quran to make his point: "be conscious of God and always speak the truth ..."
"Islam is not part of the problem in combatting violent extremism -- it is an important part of promoting peace," he said.
"Hamas must put an end to violence, recognize past agreements, and recognize Israel's right to exist," he said of the organization the United States deems as terrorist.
"The Palestinian Authority must develop its capacity to govern, with institutions that serve the needs of its people," Obama said.
"At the same time, Israelis must acknowledge that just as Israel's right to exist cannot be denied, neither can Palestine. The United States does not accept the legitimacy of continued Israeli settlements" on the West Bank and outskirts of Jerusalem, he said. "It is time for these settlements to stop."
As for Jerusalem itself, he said it should be a "secure and lasting home for Jews and Christians and Muslims ..."
Obama also said the Arab nations should no longer use the conflict with Israel to distract their own people from other problems.
He treaded lightly on one issue that President George W. Bush had made a centerpiece of his second term -- the spread of democracy.
Obama said he has a commitment to governments "that reflect the will of the people." And yet, he said, "No system of government can or should be imposed upon one nation by any other."
At times, there was an echo of Obama's campaign mantra of change in his remarks, and he said many are afraid it cannot occur.
"There is so much fear, so much mistrust. But if we choose to be bound by the past, we will never move forward," he said.
The president's brief stay in Cairo included a visit to the Sultan Hassan mosque, a 600-year-old center of Islamic worship and study. He also toured the Great Pyramids of Giza, and joked with reporters that if they were not present, "I'd get on a camel." Some of his aides did just that.
The build-up to the speech was enormous, stoked by the White House although Obama seemed at pains to minimize hopes for immediate consequences.
"One speech is not going to solve all the problems in the Middle East," he told a French interviewer. "Expectations should be somewhat modest."
Eager to spread the president's message as widely as possible, the tech-savvy White House orchestrated a live Webcast of the speech on the White House site; remarks translated into 13 languages; a special State Department site where users could sign up for speech highlights; and distribution of excerpts to social networking giants MySpace, Twitter and Facebook.
Though the speech was co-sponsored by al-Azhar University, which has taught science and Quranic scripture here for nearly a millennium, the actual venue was the more modern and secular Cairo University.
Red draperies formed a backdrop for the speech, blocking view of a portrait of Mubarak, an aging autocrat who's ruled Egypt since 1981.