Saudi Arabia’s foreign minister has urged Barack Obama, the US president, to follow up his speech to the Muslim world with tangible action, including applying stronger pressure on Israel to accept a viable Palestinian state.

“The United States has the means to persuade the Israelis to work for a peaceful settlement,” Prince Saud al-Faisal, the foreign minister, said in an interview with Newsweek, a US magazine. “It needs to tell them that if it is going to continue to help them, they must be reasonable and make reasonable concessions.”

Asked if the US should withhold aid to Israel, Prince Saud said: “Why not? If you give aid to someone and they indiscriminately occupy other people’s lands, you bear some responsibility.”

Prince Saud was speaking after Mr Obama delivered a landmark address to the Muslim world from Cairo last week in which he sought to improve US-Muslim relations. Mr Obama pledged to advance the peace process and criticised Israeli settlement in the West Bank.

Describing Mr Obama’s speech as “positive, balanced and comprehensive”, Prince Saud said that, after decades of negotiation, what mattered was implementation and reiterated the Saudi stance that the restoration of lands is a precondition for normalisation of ties.

“The key point was that America is changing policy. It is not the same America. He talked about humility, not power. He talked about democracy – that the United States wished the world to be democratic – but is not going to force the world to be democratic. If he was looking for converts to his way of thinking, I think he achieved it.”