Trump is the first president to travel to Jerusalem on his first trip overseas.
And now he will make his first visit to Israel full of promises but with few concrete ideas of solving the problem that has vexed presidents for decades.
Associated Press writer Josef Federman in Jerusalem contributed to this report.
Security was extremely tight for the Israeli leg of the visit, with police deploying some 10,000 officers.
Trump's visit to Israel began with a lighthearted moment. Netanyahu frequently clashed with former President Barack Obama.
A video of the exchange shows a horrified Netanyahu attempting to lower Hazan's outstretched camera-aiming arm, but scandal-plagued Hazan successfully snapping a selfie of the two that amassed tens of thousands of "likes" within hours and was widely lampooned over Twitter.
While hosting Abbas at the White House in March, Trump boldly stated that achieving peace is "something that I think is, frankly, maybe not as hard as people have thought over the years".
Yesterday, after several Israeli Cabinet ministers said they planned to skip Trump's welcome ceremony, Netanyahu ordered them to attend before angrily dismissing the Cabinet meeting, an Israeli official told Haaretz.
Israel and the Palestinians have not held direct talks for more than three years and Mr Trump acknowledged it was "one of the toughest deals of all".
He added: "I think the visit is more of a symbolic nature, to create a positive atmosphere and to set the stage for a possible process".
He said: "Now we must work together to build a future where the nations of the region are at peace and all of our children can grow, and grow up strong, and grow up free from terrorism and violence".
Afterwards, he is expected to become the first sitting United States president to visit the Western Wall, the holiest site where Jews can pray and located in east Jerusalem.More news: GOP health bill: 23M more uninsured; sick risk higher costs
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The Western Wall is not officially recognised as Israeli territory, and the Trump administration has not been clear about whether they believe the holy site is part of Israel.
The prime minister, who had a frosty relationship with Trump's predecessor, heaped praise on the president throughout the two-day visit, declaring: "We understand each other".
Israeli officials had been anxious that the Trump administration would divulge sensitive intelligence to Russian Federation, which would then be passed on to Iran.
"I never mentioned the word or the name Israel".
The alleys and passageways of Jerusalem's ancient Old City, which Trump visited later in the day, were essentially under lockdown. He urged Netanyahu to reject Palestinian statehood and insist that Jerusalem remain under Israeli sovereignty forever. This is the restaurant owner, Manuel Ozel.
"It is something that I think is frankly maybe not as hard as people have thought over the years", Trumpsaid when meeting Abbas in Washington earlier this month.
ESTRIN: And so far, do you think he's given that green light?
Rouhani also said Iran would continue a ballistic missile program that has already triggered US sanctions, saying it was for defensive purposes only. So we're stuck in the middle.
Trump then interjected: "We have something very much in common". Stop talking. Either do, or don't talk. Rabinowitz said he told Trump how his heroes were those Jews throughout the centuries who had braved both the heat and cold rain and ignored personal danger and persecution to arrive at the Wall at dawn to pray.
SALAMEH: Bill Clinton came.
Jibril Rajoub, a senior Palestinian official close to Abbas, said Trump was a "serious president" who "seeks to have a real deal, not just managing the conflict".