U.S. and Israeli officials are working hard to ease tensions between the two countries.
Obama administration officials publicly criticized Israel for announcing new construction in a Jewish neighborhood in east Jerusalem during Vice President Joe Biden's visit last week.
Israeli officials say Prime Minister Benjamin Netanyahu is willing to go some lengths to calm tensions. He intends to make a visit to Washington next week.
Secretary of State Clinton insisted the two countries remain strong allies.
"We have a close unshakeable bond between the U.S. and Israel and between the American/Israeli people who share common values and commitment to a democratic future for the world and we are both committed to a two-state solution. But that doesn't mean that we're going to agree," she said.
The U.S. wants a statement from Israel and the Palestinians that the biggest issues dividing the two parties are on the table for talks, including the future of Jerusalem.
"Israel appreciates and values the warm words of Secretary of State Clinton about the deep ties between Israel and the U.S. and the commitment of the U.S. to Israel's security," government spokesman Mark Regev said in Jerusalem. "Concerning the commitment to peace - Israel's government has proved over the past year its commitment to peace, in words and in deeds."