"It is past time for a secure and just two-state solution. We will work to achieve it, and to defeat the extremists who would perpetuate the conflict," he told a security conference in Munich.
"And, building on the positive elements of the Arab Peace initiative put forward by Saudi Arabia, we will work toward a broader regional peace between Israel and its Arab neighbors."
He also said the United States was willing to talk with Iran, but will act to isolate and pressure Tehran if Iran continues its current course and does not abandon its nuclear ambitions and support for terrorism.
In a sweeping speech to international leaders and security experts, Biden said the US will strive to act preventively to avoid having to choose between the risks of war and the dangers of inaction.
But he held out the option that the US could take pre-emptive action against Iran if necessary to stop crisis before they start.
Biden added it was time to repair the rift in relations between the US and Russia. He said NATO and Russia should cooperate to defeat the Taliban and al-Qaida, but warned the US will continue to have differences with Moscow, including opposition to its efforts to carve out independent states in Georgia.
Biden's comments come just days after the former Soviet republic of Kyrgyzstan announced it will shut down American access to the Manas air base, which the US uses to resupply troops in Afghanistan. The decision came after Kyrgyzstan secured more than $2 billion in loans and aid from Russia.
Reuters and The Associated Press contributed to this report