Hillary Clinton warns Israel faces 'difficult' choices
Mrs Clinton warned that Israel was facing tough challenges
US Secretary of State Hillary Clinton has called on Israel to make "difficult but necessary choices" if it wants a peace agreement with the Palestinians.
Mrs Clinton warned that the status quo was "unsustainable" in a speech to a pro-Israel lobby group.
Her comments come amid a dispute between the US and Israel over plans for 1,600 new homes in East Jerusalem.
On Sunday, Israeli Prime Minister Benjamin Netanyahu ruled out halting settlement construction in the city.
Jeremy Bowen, Middle East editor, BBC News
In the end there was no booing, which some had expected. The audience of 7,500 activists from one of the strongest political lobbies in America interrupted Secretary Clinton's speech with applause more than 25 times.
They liked her tough words about Iran. But they were largely silent as she explained why the US had condemned Israel's latest plans to build for Jews on occupied territory in Jerusalem. She presented the Obama administration as an unshakeable friend of Israel, unafraid to give it straight advice about its best interests.
The status quo, she said, was not sustainable, even if some in Israel thought that it was. Without going into too much detail, she sketched out the settlement the US wanted - a Palestinian state alongside Israel, living in peace, with borders based on the ceasefire line that held until Israel captured the West Bank and East Jerusalem in 1967.
Jerusalem, at the centre of the recent row between the US and Israel, needed a solution that would realise the aspirations of both sides, she said. That's code for a Palestinian capital as well as an Israeli one. Easy to talk about, very hard to achieve.
The Palestinian Authority is furious at Israel's insistence on building on occupied territory. It sees it as a serious stumbling block to the resumption of talks, which have been stalled for more than a year.
Nearly 500,000 Jews live in more than 100 settlements built since Israel's 1967 occupation of the West Bank and East Jerusalem. They are held to be illegal under international law, though Israel disputes this.
In her speech to a convention in Washington of the influential Aipac (American Israel Public Affairs Committee), Mrs Clinton underscored the Obama administration's "rock solid" commitment to Israel.
"Guaranteeing Israel's security is more than a policy position for me. It is a personal commitment that will never waver," she said.
But, she added, it is Washington's "responsibility to give credit when it is due and to tell the truth when it is needed".
New construction in East Jerusalem or the West Bank "undermines mutual trust" and "exposes daylight between Israel and the United States that others in the region hope to exploit" she said.
Mrs Clinton has demanded Mr Netanyahu move to restore confidence in the peace process, including extending the suspension of new building in the West Bank to include East Jerusalem.
In a telephone call on Friday, the Israeli prime minister proposed a series of "trust-building measures" that represented "a real effort" to aid US peace efforts.
Although details have not yet been made public, Israeli officials say these include an agreement to discuss all outstanding issues in the indirect "proximity talks" being mediated by US special envoy George Mitchell.
However Israel will not discuss a freeze on settlement construction in Jerusalem.
The status quo is unsustainable for all sides. It promises only violence and unrealised aspirations
"As far as we are concerned, building in Jerusalem is like building in Tel Aviv," Mr Netanyahu told his cabinet on Sunday.
But Mrs Clinton warned in her speech to Aipac that the "status quo is unsustainable for all sides" and "promises only violence and unrealised aspirations".
"There is another path - a path that leads toward security and prosperity for all the people of the region. It will require all parties including Israel to make difficult but necessary choices," she said.
Mrs Clinton also spoke of the need for sanctions against Iran over its nuclear programme.
She called for "sanctions that will bite".
Iran says its nuclear programme is for peaceful, civilian use, but the US disagrees.
"Let me be very clear: The United States is determined to prevent Iran from acquiring nuclear weapons," the secretary of state said.
If Iran developed a nuclear weapon, it would embolden terrorists and spark an arms race that would destabilise the Middle East, Mrs Clinton said.
"This is unacceptable to the United States, unacceptable to Israel and unacceptable to the region and the international community," she added.
The US and its allies have been pressing for sanctions on Iran, but China and Russia have so far resisted them.
Mr Mitchell, Mr Obama's Middle East envoy, is back in the region.
WHAT IS AIPAC?
Full name: the American Israel Public Affairs Committee
"The most important organisation affecting America's relationship with Israel" (New York Times)
100,000 members, mostly American Jews. Not registered as a lobby for Israel because it does not receive money from Israel
Political influence comes from ability to raise money to back congressional candidates who support its agenda
In 2005, a Pentagon analyst pleaded guilty to passing US government secrets to two Aipac officials who were later fired
Critics say it tends to favour more right-wing Israeli government policies and distorts US foreign policy
Speaking in the Jordanian capital, Amman, he said the US was seeking an early resumption of the stalled indirect talks between Israel and the Palestinians.
After meeting the Palestinian Authority President Mahmoud Abbas, Mr Mitchell urged the two sides to exercise restraint.
His latest visit comes amid increased tension between Israel and the Palestinians.
On Sunday, Israeli soldiers shot dead two Palestinians in the West Bank. The circumstances were unclear, but one report said the soldiers opened fire when the Palestinians tried to stab them.
Two Palestinian youths were killed by Israeli troops on Saturday following violent clashes with Jewish settlers.
Mr Netanyahu is due to meet Mrs Clinton, President Barack Obama and Vice-President Joe Biden in Washington on Tuesday during a visit which will also see him address Aipac members.
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