President Obama urged the Israeli government to loosen its blockade of Gaza on Wednesday, as the United States continued to scramble to find a way out of the stalemate in the Middle East and address the outcry over Israel’s deadly raid on a Gaza-bound flotilla last week.

Mr. Obama, meeting with the Palestinian president, Mahmoud Abbas, at the White House, also promised a $400 million aid package for the West Bank and Gaza, though only about $70 million represented a new commitment. White House officials said the money would be spent on housing, schools, efforts to provide access to drinking water and other health and infrastructure projects.

The details of how the aid would be used in Gaza remained unclear. Nor was it immediately clear how Mr. Abbas, who has authority in the West Bank but not in Gaza, would be able to administer it.

Gaza has faced an Israeli and Egyptian blockade since 2007. An Israeli raid that thwarted a Turkish-led flotilla carrying aid and activists toward Gaza last week intensified international protests over the blockade, which Mr. Obama has called “unsustainable.” Israel contends that the blockade is necessary to prevent the smuggling of arms to Hamas, the militant Islamist organization that governs Gaza and opposes Israel’s existence.

Administration officials and their European allies have been pressing the Israeli government to partly lift the blockade to allow a freer flow of nonmilitary goods.

“We, and I think President Abbas agrees with this, recognize that Israel should not have missiles flying out of Gaza into its territories,” Mr. Obama said Wednesday. “And so there should be a means by which we are able to stop the flow of arms that could endanger Israel’s security.”

“At the same time,” the president added, “we’re doing so in a way that allows the people in Gaza to live out their aspirations and their dreams both for themselves and their children. And that’s something that we’re going to spend a lot of time focusing on, and we’ve already begun some hardheaded discussions with the Israelis in achieving that.”

Mr. Obama said that “there should be some ways of focusing narrowly on arms shipments rather than focusing in a blanket way on stopping everything and then, in a piecemeal way, allowing things into Gaza.”

In the past few days, Israel has added juice and preserves to the basic supplies it allows into Gaza but has denied that this signaled any change in policy as a result of international pressure. An Israeli security official, speaking on the condition of anonymity under army rules, said the broadening of the list of supplies was “the continuation of a process” that had been going on for months.

International organizations working in Gaza have warned of growing hardship. Deprived of raw materials, local industry has been severely damaged, and the Gaza economy has collapsed.

“It is not enough to permit Gaza residents to purchase Israeli-made cookies,” Gisha, an advocacy group that focuses on freedom of movement for Palestinians, said in a statement on Wednesday. “Israel should stop banning raw materials such as industrial margarine and glucose, so that Gaza residents can produce their own cookies and restart the economy that has been paralyzed for three years.”

Mr. Obama is trying to steer Palestinians back to the negotiating table with Israelis, while at the same time trying to persuade Israelis that the United States and his administration have Israel’s best interests at heart.

Many Israelis blame Mr. Obama for Mr. Abbas’s refusal so far to engage in direct negotiations. When Mr. Obama demanded last year that Israel freeze construction of settlements in the West Bank, a demand that Israel refused, many Palestinian officials said afterward that they could not go ahead with direct negotiations. But in the past, Palestinians had often entered direct negotiations with Israel absent such a freeze.

Mr. Abbas is still seeking some sort of gesture, either from the Americans or from the Israelis, administration officials said, before he will enter direct negotiations.

“The Palestinian position is that we’ve been engaged with Mitchell,” said Ghaith al-Omari, a former negotiator with the Palestinian Authority, referring to Mr. Obama’s Middle East envoy, George J. Mitchell. “We’ve given position papers to Mitchell. We don’t have a problem with moving to direct talks, but before that the Israelis have to present their positions to the administration.”

Israeli officials counter that they do not want to offer their positions before direct talks begin, because that would be akin to negotiating against themselves.

After Mr. Obama’s meeting with Mr. Abbas, the White House put out a statement that “the president has described the situation in Gaza as unsustainable, and it demands a significant change in strategy.”

The statement said that “while we work with our partners in the Palestinian Authority, Israel, Egypt and the international community to put such a strategy in place, these projects represent a down payment on the United States’ commitment to Palestinians in Gaza, who deserve a better life and expanded opportunities, and the chance to take part in building a viable, independent state of Palestine, together with those who live in the West Bank.”