US Vice President Joseph Biden said Tuesday that Israel must accept a two-state solution with the Palestinians, urging Jerusalem to stop settlement growth.

"Israel has to work toward a two-state solution," Biden told the American Israel Public Affairs Committee annual conference. "You're not going to like my saying this, but not build more settlements, dismantle existing outposts and allow the Palestinians freedom of movement."

He noted that President Barack Obama is "strongly and personally committed to achieving what all have basically said is needed - a two-state solution," something he called "absolutely necessary to ensure Israel's survival as a Jewish, democratic state."

But Israel's new government has so far declined to back a Palestinian state, with Prime Minister Binyamin Netanyahu referring to formulas for Palestinian autonomy instead. Netanyahu is planning to meet with Obama and Biden on May 18, and the issue is expected to be a focus of their conversations.

Biden's comments went farther than previous administration statements in demonstrating its demands to Israel, particularly as stated before America's largest pro-Israel lobby.

He also referred to the ameliorative effect that a peace deal with the Palestinians could have with Iran.

Some in Israel have been worried about the administration explicitly linking the issues, and while Biden didn't condition progress with Iran on Israeli movement with the Palestinians, he argued that making progress toward peace would help resolve the problem with Iran.

Of the many reasons to work toward Israeli-Palestinian peace, he said, "One of the most pressing reasons may be to deprive Iran of the ability to extend its destabilizing influence" by inflaming public opinion and helping rejectionist groups like Hamas and Hizbullah.

Biden reiterated that the US government was "intensely focused on avoiding the grave danger... of a nuclear armed Iran" and asserted that the administration's new engagement strategy offered the best chance of success.

He justified the outreach as strengthening international support if engagement failed, adding, "Ladies and gentlemen, don't kid yourselves - international support matters, as we've learned over the last eight years."

He said the "Islamic republic" - a term of respect that observers have interpreted as a message that America is not seeking regime change - faced a choice. One path would bring it into the community of nations. The other was "one of international pressure, isolation, and one which nothing is taken off the table."

"If our efforts to address this problem through engagement are not successful, we have greater international support to consider other options," he said to applause. "We must sometimes act alone, but it's always stronger when we act in unison with a secure Jewish State of Israel living side by side in peace and security with a viable and independent Palestinian state. He [Obama] and I both believe that," Biden said.

"That is also the solution that Israel and the Palestinians committed to in the road map and reaffirmed in Annapolis," he said. "It can be achieved. It must be achieved."

"The continuation of Israeli-Palestinian and Israeli-Arab... conflicts strengthen Iran's strategic position. They give Iran a playing field upon which to extend its influence, sponsor extremist elements, inflame public opinion - all which are counterintuitive. It's counterintuitive if you think about it, that Iran's Shia influence in a Sunni Arab world would be able to be extended. There are many reasons to pursue an end to these conflicts," he said.

"It gives Israelis peace and security they deserve; to help the Palestinians fulfill their aspirations of an independent and better life; to ease tension in the regions - in this region," Biden said.