United States Vice President Joe Biden warned Israelis in a direct address from Tel Aviv on Thursday that the status quo in the Middle East was not sustainable, and vowed that the United States would do everything in its power to prevent Iran from obtaining nuclear weapons.

He also urged both Israelis and the Palestinians look toward direct negotiations to end the long-standing conflict.

"The demographic realities make it difficult for Israel to be a Jewish homeland and a democratic country," said Biden in his speech to foreign dignitaries, Israeli officials and students at Tel Aviv University. "The status quo is not sustainable."

"To end this historic conflict, both sides must be historically bold," he said.

Biden's speech came two days after a row erupted between Israel and the U.S. over Israel's announcement that it is to build 1,600 new homes in a Jewish neighbourhoood of East Jerusalem. The vice president and the White House both condemned the decision Tuesday, saying that it damaged chances of resuming talks between Israel and the Palestinians. The Palestinian Authority has said that talks are on hold until Israeli construction is halted in East Jerusalem, an area the Palestinians intend to make their capital.

On Thursday, however, Biden sought to play down the latest tensions between Washington and Jerusalem, repeatedly stressing the close ties the two nations share. The United States, the vice president said, has "no better friend than Israel." He did, nontheless, reiterate that such moves jeopardize the fragile peace process.

He said that the U.S. stands beside the Jewish state in the face of external threats, including the "insidious campaign to challenge Israel's right to exist."

"Every day Israel faces threats no country should have to endure. America stands with you shoulder to shoulder facing these threats. The United States stands firmly next to Israel against the scourge of terrorism," he said.

"We lead the fight against the campaign to question Israel's legitimacy," said Biden. He stressed that Israel-U.S. ties are "impervious to shifts in partisan politics."

But, the vice president said, peace talks between Israelis and Palestinians must continue, regardless of obstacles that may arise along the way to peace.

"The most important thing is for these talks to go forward and go forward promptly and go forward in good faith," Biden said. "We can't delay because when progress is postponed, extremists exploit our differences."

Biden said Palestinians had misunderstood Israel's announcement of the settlement plan, thinking that building would begin immediately. With no construction scheduled for now, he said, negotiators would have time to "resolve this and other outstanding issues."

On Iran's nuclear program - a major source of concern for Israel, which has heard many calls from Iranian President Mahmoud Ahmadinejad for its destruction - the vice president reassured the Israeli public that the United States is committed to taking a strong stance against its contentious nuclear program.

"The U.S. is determined to prevent Iran from acquiring nuclear weapons. Period," Biden declared.

"Iranians are suffering under a leadership that supports terrorism," added Biden. He further said that "Iran has refused to cooperate" and that the "U.S. is determined to keep up pressure on Iran to change its course.