Thousands of people turned out at Tel Aviv's Rabin Square on Saturday night to mark the 14th anniversary of the assassination of prime minister Yitzhak Rabin.
"Once more we've resolved to not be consumed by the pain of [Rabin's] death, but rather to be inspired by his life," Obama said.
"He imagined a different future for his children and his grandchildren, declaring on the stage [the night that he was killed in the square]: No to war, yes to peace," the US president continued
He urged Israel to internalize what he said was obvious, that "Israelis will not find true security while the Palestinians are gripped by hopelessness and despair.
"Do we have the resolve to be like Yitzhak, a soldier for necessary peace, a soldier who walked the hard path?" Obama asked. "Yes, we will move forward, yes, we will persevere in the face of [incredible] odds, and on to inevitable victory.
"We will never lose sight of our shared purpose: A just and lasting peace between Israel, the Palestinians, and the Arab world," he said.
"On that terrible November night, Yitzhak left us with his death," he said. "Now it is up to us to carry on its meaning; to carry on his work.
"To all who seek peace I say tonight, you will always have a partner in the United States of America and in my administration," Obama said. "That's why we've been working aggressively for our clear goal, two states living side by side in peace and security."
Earlier, at the start of the event, President Shimon Peres called on Palestinian Authority President Mahmoud Abbas not to give up on the peace process. Peres spoke at length of the need to continue to strive for peace with the Palestinians.
"Yitzhak is not with us, but he lives in our midst as a figure, as a policy, as a purpose: A joint purpose of a just society and comprehensive peace - two inseparable goals," Peres said.
Defense Minister and Labor Party Chairman Ehud Barak also praised Rabin's efforts and urged the Palestinians to renew direct negotiations.
"Your spirit, Yitzhak, encompasses this square," he began. "We are followers of your path, members of Labor and the peace camp. We wish to wave here again the flag that your blood covered, to realize your vision and to fully scale the summit that you strove for.
"The road is not easy," Barak continued. "More [problems] and victims are expected, but especially because of that, it is worthwhile to press on.
"Come to the negotiating table," the defense minister implored Abbas. "It is our responsibility to history, and our responsibility to [our children].
"[We are] obligated to demonstrate bravery and overcome the frustrations of the past and all considerations," Barak said. "This is the essence of our function as leaders, to change the reality and to bring peace."
The event had been scheduled for a week earlier, but it was postponed due to rain.
Soldier, diplomat, politician, statesman and Nobel Peace Prize laureate, Rabin was shot dead on November 4, 1995, at the conclusion of a rally organized as a demonstration of support for the Oslo agreements.
Ner Yitzhak, the annual state ceremony that ushered in the commemorative events, was held at Beit Hanassi on October 27. It was followed by a special session at the Knesset the next day, during which the nation's political leadership expressed hope that the lessons learned from that fateful night 14 years ago could help Israel confront its challenges in the future.
Saturday evening's rally in Tel Aviv was dominated by Peace Now, Meretz and a sea of blue-shirted members of the Habonim Dror socialist-Zionist youth movement.
Signs slamming the government were present throughout the square, with Peace Now's massive balloon-held signs bearing the message "The Netanyahu Government Refuses Peace."
There was an air of hope throughout the rally, marked by pro-peace messages on stickers, banners and in discussions with some of the attendees, many of whom sat in large circles in the middle of the square.
Lily Sowin from Tel Aviv said the evening was "not sad, but bitter. There is a hope for peace here, but there are no charismatic leaders to achieve peace. I hope there will be new Israeli and Palestinian leaders, because there is a need for a change, there is a need for hope and a peace that both sides have never had."
Michael Mylrea, a Fulbright scholar developing a peace paradigm for the region at Tel Aviv University, said, "During a time when peace seems distant, as polarization moves Israeli and Palestinian parties away from peace, Rabin's vision and dedication to a lasting peace is needed now more than ever."