In declaring that it was time for Middle East peace "without preconditions," President Obama used his speech to the U.N. General Assembly Wednesday to fire a warning at Israel that "America does not accept the legitimacy of continued Israeli settlements."

Obama's stark declaration, which drew applause, was coupled with a call for Palestinians to end their "incitement of Israel."

But it was the use of the U.N. forum to carry the settlement message to Israel that drew the most enthusiastic response on the floor and incredulous reaction outside its walls.

Obama just put Israel "on the chopping block," said former U.S. Ambassador to the U.N. John Bolton.

Obama said he met Tuesday with Palestinian Authority President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu, who was not in attendance at the speech, and agreed that the two have made some progress in both strengthening security and facilitating freedom of movement that has allowed the economy in the West Bank to grow.

But he added, more progress is needed.

"We continue to call on Palestinians to end incitement against Israel, and we continue to emphasize that America does not accept the legitimacy of continued Israeli settlements," he said.

Obama said four issues separate the two sides: security, borders, refugees and Jerusalem, but the goal is clear: a secure, Jewish state for Israel and "a viable, independent Palestinian state with contiguous territory that ends the occupation that began in 1967."

He also said a new order is needed in dealing with the dispute.

"The United States does Israel no favors when we fail to couple an unwavering commitment to its security with an insistence that Israel respect the legitimate claims and rights of the Palestinians. And nations within this body do the Palestinians no favors when they choose vitriolic attacks over a constructive willingness to recognize Israel's legitimacy, and its right to exist in peace and security," he said.

In his first speech to the world body, Obama applied his campaign slogan to the international community and challenged the global community to step up and fix the world's problems both at home and abroad.

He said it is no longer plausible to be bad actors and then blame the United States.

"The people of the world want change," he said, noting that "just as no nation should be forced to accept the tyranny of another nation, no individual should be forced to accept the tyranny of their own government."

The world's problems are not "solely America's endeavor," Obama said, noting the threats from poverty, global warming, disease pandemics and overpopulation.

"Those who used to chastise America for acting alone in the world cannot now stand by and wait for America to solve the world's problems alone," Obama said.

Obama said he's led by example by prohibiting torture of detainees and ordering the closure of the military prison in Guantanamo Bay, Cuba. He added he is is committed to removing all U.S. troops from Iraq by 2011 and is working to reach the goal of "a world without nuclear weapons."

He said the G-20 industrialized nations have spent $2 trillion to keep the world from the brink of an economic collapse and has demonstrated its commitment to the world body by paying its bills and joining the Human Rights Council.

"Nothing is easier than blaming others for our troubles and absolving ourselves of responsibility for our choices and our actions. Anyone can do that. Responsibility and leadership in the 21st century demands more. In an era when our destiny is shared, power is no longer a zero sum game. No one nation can or should try to dominate another nation. No world order that elevates one nation or group of people over another will succeed. No balance of power among nations will hold," he said.

Speaking to the 59th opening session of the U.N. General Assembly, Obama laid out four pillars for the world community -- peace in the Mideast and elsewhere, a reduction in nuclear weapons, preservation of the environment and global economic opportunity.

Obama said he wants a post-atomic age, and will hold countries accountable for threatening the rest of the globe with nuclear weapons as the United States tries to reduce its arsenal.

Saying the United States will work with Russia to reduce its strategic warheads through an update of the Strategic Arms Reduction Treaty, Obama pledged to move to ratify the Test Ban Treaty, work with others so that "nuclear testing is permanently prohibited," begin negotiations in January on a treaty to end fissile material production and host a summit in April that reaffirms each nation's responsibility to secure nuclear material on its territory.

While he said he was not going to single out any nation, in the next sentence Obama called out North Korea and Iran as threats to world cooperation.

"Those nations that refuse to live up to their obligations must face consequences. This is not about singling out individual nations -- it is about standing up for the rights of all nations that do live up to their responsibilities," he said, adding "the governments of North Korea and Iran threaten to take us down this dangerous slope."

"I am committed to diplomacy that opens a path to greater prosperity and a more secure peace for both nations if they live up to their obligations. ... But if the governments of Iran and North Korea choose to ignore international standards ... then they must be held accountable."

As Obama spoke, Libyan leader Muammar al-Qaddafi, who followed Obama in delivering a speech from the dais, scribbled notes as he listened to the U.S. president through a translation ear piece. Iranian President Ahmadinejad also sat still listening with his hands cusped together in his lap. He did not take notes. Neither applauded during the speech, though Qaddafi clapped when the president ended his remarks. Ahmadinejad did not.

In his 38-minute speech, Obama pressed the world to cooperate on carbon emissions reduction, saying the "wealthy nations that did so much to damage the environment in the 20th century must accept our obligation to lead" but "the fast-growing carbon emitters who can do more to reduce their air pollution without inhibiting growth."

Obama also pledged continued aid through the Global Fund to fight HIV/AIDS, tuberculosis, malaria and polio, and by contributions of H1N1 vaccines to the World Health Organization.

He also talked about greater integration of economies through global trade and the Millennium Development Goals.

"Now is the time for all of us to do our part. Growth will not be sustained or shared unless all nations embrace their responsibility. Wealthy nations must open their markets to more goods and extend a hand to those with less, while reforming international institutions to give more nations a greater voice. Developing nations must root out the corruption that is an obstacle to progress ... That's why we will support honest police and independent judges; civil society and a vibrant private sector," he said.

"Those nations that refuse to live up to their obligations must face consequences. This is not about singling out individual nations -- it is about standing up for the rights of all nations that do live up to their responsibilities," he said, adding "the governments of North Korea and Iran threaten to take us down this dangerous slope."

The world's problems are not "solely America's endeavor," Obama said, noting the threats from poverty, global warming, disease pandemics and overpopulation.