Here is what the President actually said

"So while the core issues of the conflict must be negotiated, the basis of those negotiations is clear:  a viable Palestine, a secure Israel.  The United States believes that negotiations should result in two states, with permanent Palestinian borders with Israel, Jordan, and Egypt, and permanent Israeli borders with Palestine.  We believe the borders of Israel and Palestine should be based on the 1967 lines with mutually agreed swaps, so that secure and recognized borders are established for both states.  The Palestinian people must have the right to govern themselves, and reach their full potential, in a sovereign and contiguous state."