A two-state solution between Israel and the Palestinians is now needed more urgently than ever, US Secretary of State Condoleezza Rice has said.
Israel has said it will not compromise on its security
Ms Rice also urged Arab states to accept a peaceful and permanent home for Israel.
Israel has said there can be no deal for a Palestinian state unless its own security is guaranteed.
Ms Rice is in the region to prepare the ground for a planned peace conference in the US later this month.
But she said on Sunday that she was not yet ready to set a date for the conference.
Speaking at an event in Jerusalem, also attended by Israeli Prime Minister Ehud Olmert and international envoy former British Prime Minister Tony Blair, Ms Rice said the US would continue to work for a peaceful settlement in the region.
Mr Olmert expressed optimism that progress could be made on the issue before US President George W Bush left office in January 2009.
Earlier on Sunday Ms Rice met separately with both Mr Olmert and with Israeli Foreign Minister Tzipi Livni for talks.
At a joint press conference Ms Livni said that security for Israel had to come first before any deal could be reached.
Ms Livni insisted that progress could be made once the Palestinians agreed to implement their obligations under a long-stalled US-backed "road map" for peace.
"The meaning is security for Israel first and then the establishment of a Palestinian state," she said. "Nobody wants to see another terror state in the region."
Israel has been concerned about the takeover of Gaza in June by the Islamist movement Hamas, which does not recognise the state of Israel and is branded a terrorist organisation by Israel, the US and the EU.
On Monday, Ms Rice will travel to the West Bank for talks with Palestinian Authority President Mahmoud Abbas, whose Fatah group remains in control there.
Ms Rice is on her eighth visit to the region this year, hoping to inject life into the Israeli-Palestinian peace process. But expectations of her visit and the Maryland conference are low.
The Palestinians want a clear timetable for resolving some of the most sensitive issues in the conflict, including the status of Jerusalem and the borders of a Palestinian state.
Israel has rejected written deadlines, saying the whole process can be damaged if they are missed.
The former Palestinian Prime Minister, Ismail Haniya of Hamas, on Sunday urged President Abbas not to attend the Maryland conference.
In a speech in Gaza City, he said the meeting would not be in the Palestinians' interests and would have detrimental repercussions for the whole region.
Mr Haniya and Hamas have not been invited to the US-led talks.