Mr Gates reaffirmed 'the strong commitment of the US to the security of Israel'
US Defence Secretary Robert Gates has urged Iran to respond to US diplomatic overtures by September.
His Israeli counterpart Ehud Barak indicated that military action remained an option on Iran, following talks with Mr Gates in Jerusalem.
Senior US officials are engaged in a drive to breathe new life into faltering regional peace moves.
US envoy George Mitchell met Egypt's Hosni Mubarak, as well as Israel's president and the Palestinian leader.
He has already been in Syria, drumming up regional support for the new US initiative.
Both Mr Mitchell and Mr Gates - as well as two other senior US envoys - are meeting Israeli leaders as part of the bid to revive the Israeli-Palestinian peace process, which has been stalled for six months.
US-Israeli relations have become strained since US President Barack Obama demanded a halt to all Israeli settlement building in the occupied West Bank.
Shortly after coming to office in January, Mr Obama made an overture to Iran, saying that if it and countries like it were "willing to unclench their fists, they will find an extended hand from us".
Tim Franks, BBC News, Jerusalem
The public rhetoric is all about "discussions among friends". But the background noise has a different tone. When it comes to Iran's nuclear ambitions, US Defence Secretary Robert Gates was keen to stress the American offer to bring Iran into talks - albeit an offer that was not open-ended.
In contrast, Israeli Defence Minister Ehud Barak emphasised an implied military threat to Iran. There has been unease in Israel over Secretary of State Hillary Clinton's comments about a regional "defence umbrella", should Iran acquire a nuclear weapon. The Israeli formula is to say that such a prospect is "unthinkable".
The Israelis have also been feeling American heat over the continued building of Israeli settlements in occupied Palestinian territory. Reports are circulating of a possible deal - which might allow as many as 2,000 apartments in the West Bank to be completed.
The Palestinians have said they would accept no such compromise. And they say they have a question for the visiting American officials: if the Israelis don't budge, what exactly are you going to do about it?
But Israel says Iran's alleged nuclear ambitions remain its number-one concern and in recent weeks the US has expressed dismay about Iran's suppression of protests over disputed presidential elections.
Iran denies claims it wants to build nuclear weapons, saying it is enriching uranium for a civilian energy programme.
On Monday, Mr Gates said the US offer to Iran was "not open-ended", echoing comments by US Secretary of State Hillary Clinton earlier this month.
Mr Obama was hoping for a response by the time of the UN General Assembly in September, Mr Gates added.
Mr Barak cautioned that "no option" had been removed in its handling of Iran - suggesting military force remained a possibility - though "priority should be given still to diplomacy and sanctions".
The two men struck a conciliatory tone, with Mr Gates speaking of a "good meeting" with Mr Barak and reaffirming America's "strong commitment" to Israel's security.
Mr Barak said he was "extremely thankful for US support [on defence] - financial and technological".
Mr Gates later held talks with Prime Minister Benjamin Netanyahu. The Israeli leader's office said in a statement that he had emphasised the need to use "all available means" to prevent Iran developing nuclear weapons.
Mr Gates then travelled to Jordan for a meeting with King Abdullah, with the Palestinian issue and defence ties on the agenda.
In Cairo, Middle East envoy George Mitchell met President Hosni Mubarak - a day earlier than initially scheduled, apparently at Mr Mubarak's request.
US OFFICIALS' WEEK OF DIPLOMACY
Special envoy to the Middle East George Mitchell (to Syria, Israel, Palestinian Territories, Egypt, Bahrain)
Defence Secretary Robert Gates (to Israel, Jordan)
Their talks came ahead of Mr Mitchell's meeting with Palestinian Authority President Mahmoud Abbas in the West Bank town of Ramallah.
The Egyptians seemingly had plenty to discuss, reports the BBC's Christian Fraser in Cairo.
They are currently brokering reconciliation talks between the deeply divided Palestinian factions of Fatah and Hamas.
Despite several rounds of talks, the two Palestinian factions are still at odds on the most sensitive issues, such as the shape of a future unity government, the remit of the joint security force and the system that would be implemented for any upcoming elections.
Palestinian leaders have also refused to meet their Israeli counterparts until settlement activity ceases.
All settlements are illegal under international law, though Israel disputes this. Israel has settled more than 450,000 Jews in the occupied West Bank, including East Jerusalem.
In a meeting with Israeli President Shimon Peres on Monday, Mr Mitchell advised him that Israel could improve the climate by "dealing with difficult issues like settlements and outposts".
Mr Mitchell is due to meet the Israeli prime minister on Tuesday.
In Damascus on Sunday, the US envoy met Syrian President Bashar Assad for what he called "very candid and positive" discussions on restarting long-stalled peace talks between Syria and Israel.
He said Mr Obama was determined to reach a comprehensive peace between Israel and all its Arab neighbours in order to guarantee "stability, security and prosperity".
Other senior US officials - National Security Adviser James Jones and the US envoy to the Gulf states, Dennis Ross - are also due to visit the region this week.
Are you in the region? Can the push for Middle East peace work? You can send us your views using the form below:
A selection of your comments may be published, displaying your name and location unless you state otherwise in the box below.
The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide.
This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.