CAIRO - Barack Obama has presented a fresh understanding of Islam not shown by predecessors, Egyptian President Hosni Mubarak said in his first interview since the U.S. president addressed the Muslim world from Cairo.

Obama called for a new beginning in ties between the United States and Muslims, many of whom felt targeted by the war against terror launched by former President George W. Bush after the September 11, 2001 attacks, and his wars in Afghanistan and Iraq.

Under the past administration, there was a feeling that the Islamic world was a group of terrorists, Islam was hated and Muslims should be watched, and that the previous administration was scared of any Muslim, Mubarak said.

But Obama came and said we will not fight Muslims and Islam. He is a sympathetic man, and says the United States will not fight Islam because Islam is a heavenly religion, he told state television in an interview broadcast late Wednesday.

Obama told Muslims in his June 4 speech that violent extremists had exploited tensions between Muslims and the West and that Islam was not part of the problem.

His speech was welcomed by many Muslims, though some said they wanted him to spell out specific actions to resolve long-running problems like the Palestinian-Israeli conflict.

Mubarak said he discussed the Palestinian issue with the U.S. president after telling Israeli Prime Minister Benjamin Netanyahu, on a visit to Egypt prior to Obama's, that Israel needed to stop building settlements.

Obama understands this issue well, Mubarak said.

Obama wants to solve the issue (of the Palestinian-Israeli conflict) and wants to do something, but we must help him on how to solve it ... and the Israelis must help him.

In his speech, Obama told both sides they had to declare publicly the realities he said they accept in private, a blunt message for a new U.S. president; his predecessors waited longer in office before tackling the thorny issue of Middle East peace.

Obama also said he would personally pursue a drive to set up a Palestinian state alongside Israel, a solution backed by Mubarak and other Arab states but not by Netanyahu.

(Writing by Edmund Blair, Editing by Lin Noueihed)