She issued her remarks in response to statements by Israeli government officials and ambassadors calling the current diplomatic row between the two countries the lowest point of bilateral relations in 35 years, a state of crisis.
"I don't buy that," Clinton says, though U.S. dismayed by Israeli actions
"We have an absolute commitment to Israel's security. We have a close, unshakable bond between the United States and Israel and between the American and Israeli people," Clinton told reporters at the State Department.
She acknowledged that the U.S. government was disappointed and frustrated by Israel's ill-timed declaration of intents to build 1,600 new housing units in East Jerusalem, territory disputed and claimed by both the Israelis and the Palestinians.
Clinton said the two governments are discussing what steps will be taken in the coming days for Israel to show its commitment to resurrecting stalled peace talks with the Palestinians. The Israeli government has yet to respond to American overtures, but Clinton told reporters that there is "too much at stake for the Palestinians and the Israelis" and her government is determined to ensure cooperation from both sides.
Washington wants Israel to "take concrete steps" forward
Sources said the U.S. government wants Israel to "do something significant" to move forward and show its good faith and readiness to negotiate, including a retraction of the plans to build new homes in the disputed area.
Clinton reportedly requested that Israeli Prime Minister Benjamin Netanyahu's government issue an official declaration that any talks with the Palestinians - direct or indirect - would deal with all the core issues of the decades-long conflict, including borders, refugees, settlements, and the future of Jerusalem.
Gen. David Petraeus, who oversees U.S. military operations in the Mideast region, said the conflict was a major contributor to anti-American sentiment amongst Arab governments and people who may see the U.S. as overly supportive and not critical enough of Israel.
"Arab anger over the Palestinian question limits the strength and depth of U.S. partnerships with governments and peoples," Petraeus said in prepared notes to the Senate Armed Services Committee.
He further remarked that there has been "insufficient progress" towards peace in the region.
U.S. shuttle diplomacy in Mideast temporarily delayed
U.S. plans to facilitate indirect talks between the feuding parties via the Obama Administration's special envoy to the Middle East, former Sen. George Mitchell, have been delayed somewhat by the diplomatic row.
Instead of holding deliberations with representatives from both sides this week, Mitchell will instead travel to Moscow for an upcoming meeting of the Quartet, a council of four international powers discussing the state of the peace process.
A spokesman for the State Department said there was "simply not enough time to have meaningful discussions" to be ready to report before the March 18 conference in Moscow.
United Nations Secretary-General Ban Ki-moon said the U.N. is "deeply concerned over developments on the ground," condemning the Israeli construction plans while calling for "restraint and calm by all."
According to CNN.com, a former ambassador to Israel who advised Obama during his 2008 presidential campaign stressed that "the most immediate step now is for Prime Minister Netanyahu to respond positively" to the U.S. to get the proxy talks started as soon as possible and hash out misunderstandings.