WASHINGTON - President Obama said Tuesday that the United States is weighing whether to back Palestinian efforts to seek U.N. recognition for an independent state and that recent remarks by Prime Minister Benjamin Netanyahu dim hope for a negotiated two-state solution.

Obama's comments did little to repair rocky U.S.-Israeli relations, which were aggravated by a Wall Street Journal report Tuesday alleging Israel spied on sensitive negotiations about Iran's nuclear program. The report said Israel acquired information from confidential U.S. briefings and other means and shared it with members of Congress to build a case against making a deal with Iran, which has threatened to destroy Israel.

Netanyahu is feuding with the White House over an emerging deal with Iran and also has come under fire for comments he made in the final days of Israel's election last week. Netanyahu has voiced opposition to Palestinian statehood and warned his supporters that Arab voters were heading to the polls "in droves."

Netanyahu has since backtracked on his campaign statements, but the White House has reacted with skepticism.

"Netanyahu, in the election run-up, stated that a Palestinian state would not occur while he was prime minister," Obama said. "And I took him at his word that that's what he meant.

"Afterwards, he [Netanyahu] pointed out that he didn't say 'never,' but that there would be a series of conditions in which a Palestinian state could potentially be created," Obama said. "But, of course, the conditions were such that they would be impossible to meet any time soon."

Obama said he is evaluating U.S. policy on the Israeli-Palestinian conflict. But he said that in light of Netanyahu's comments, the "possibility seems very dim" for the Israelis and the Palestinians to agree to live side-by-side in peace.

Obama also said his disagreements with Netanyahu over Iran and the Palestinians shouldn't be framed as a personal issue. He said he has a "businesslike relationship" with Netanyahu and has met with him more than any other world leader.