U.S. President Barack Obama has called the situation in the Gaza Strip "unsustainable," and called for a new approach to improve conditions in the Palestinian territory.
Mr. Obama made the remarks Wednesday following his meeting at the White House with Palestinian President Mahmoud Abbas.
Speaking about Israel's blockade on Gaza, the American president said there must be a way to preserve Israel's security while allowing Palestinians to thrive.
Mr. Abbas called on Israel to lift what he called a "siege" on the Palestinian people, and to open all border crossings.
Mr. Obama also announced U.S. plans to provide an additional $400 million in aid for Palestinians in Gaza and the West Bank.
Last week, the Israeli military raided an aid convoy trying to break Israel's blockade of the Gaza Strip. Eight Turks and an American of Turkish origin were killed in the operation.
Mr. Obama called the incident a tragedy and reiterated support for the U.N. Security Council's call for a transparent investigation.
Israel has defended its actions in the raid, saying its troops acted in self defense.
The United States has been mediating indirect peace talks between the Israelis and Palestinians. President Obama predicted "real progress" in talks this year.
U.S. Middle East envoy George Mitchell met last week with Mr. Abbas and Mr. Netanyahu in the latest round of proximity talks.
Shortly before the talks, Israel announced it is easing restrictions on some formerly banned food and personal items into Gaza. Palestinian officials say Israel has lifted its restrictions on products including potato chips, soft drinks and juice.
Prime Minister Benjamin Netanyahu was scheduled to meet with President Obama in Washington earlier this month, but canceled the trip following the flotilla incident. Israeli officials say Mr. Netanyahu will now visit the White House later this month.
Some information for this report was provided by AP, AFP and Reuters.