JERUSALEM - Egypt has been "an anchor of peace" in the Middle East and preserving its 1979 peace treaty with Israel is a key priority for both Washington and the Jewish state, Prime Minister Benjamin Netanyahu said on Monday.

Speaking at the start of a dinner meeting with US Secretary of State Hillary Clinton, Netanyahu said he was keen to hear about her talks with Egypt's newly-elected Islamist President Mohamed Mursi. "I look forward, first, to hearing of your impressions from Egypt," he told Clinton, thanking her for her efforts to shore up ties between the two neighbours. "That has been an anchor of peace, and maintaining the peace treaty between us, I think, is something that is uppermost in both our minds, and I appreciate the efforts that you're investing to this end."

Talks between the two would also focus on finding a way to break the deadlock in peace talks with the Palestinians, Netanyahu said. "We are going to be talking about the Palestinians.

"That is also an anchor of peace, and we have to invest every effort to maintain its future tranquillity and see if we can move the process forward," he said. Direct peace talks between Israel and the Palestinians have been frozen for nearly two years following an intractable dispute over Jewish settlement building. Iran's nuclear programme was also on the menu, although Netanyahu described it as "a small agenda for this plate and for this dinner."

In response, Clinton reiterated her call for Israel and Washington to work closely together on the challenges arising from the huge political change sweeping the region.

"You’re absolutely right - we’re living in a time of unprecedented change with a lot of challenges for us both," she told him.

"And we will continue to consult closely as we have on almost daily basis between our two governments to chart the best way forward for peace and stability for Israel, the United States, the region and the world."

Similar statements emerged from her meetings throughout the day, with Washington's top diplomat urging the two allies to think and act together at a moment of "great change and transformation in the region."

"It is a time of uncertainty but also of opportunity," she said on meeting Israeli President Shimon Peres during the morning. "It is in moments like these that friends like us have to think together, act together."

Clinton, who arrived in Jerusalem late on Sunday after two days of talks with the new leadership in Egypt, held talks focused on Egypt, Syria, Iran's nuclear programme and peace efforts with the Palestinians.

Throughout the day, she also met Defence Minister Ehud Barak and Foreign Minister Avigdor Lieberman, updating each of them on her discussions with Egypt's Mursi and military leader Field Marshal Hussein Tantawi.

And she also sought to reassure the Israelis that Egypt's new leadership had reaffirmed support for the peace treaty - which she has described as "the cornerstone" of regional security.

There has been some concern in Israel that Mursi, who emerged out of the Islamist Muslim Brotherhood, might seek to renegotiate the treaty.

During the meeting with Peres, Clinton updated him on "the latest developments and the approaches of the new Egyptian leadership, and stressed the importance of strengthening the relations between Israel and Egypt and maintaining the peace between the countries," the president's office said.

Clinton and Peres also discussed Iran's nuclear programme which Israel, Washington and much of the West believes is a cover for a weapons drive. Tehran flatly denies the charge.

Israel says a nuclear Iran would pose an existential threat to the Jewish state and has refused to rule out a military strike on its nuclear facilities.

Clinton said the Obama administration was "committed to building and maintaining a wide coalition to deny Iran the ability to acquire nuclear weapons," and pledged that the tough economic sanctions imposed on Tehran "will continue to become harsher," Peres's office said.

Peres, who is known to favour diplomacy over the idea of a military strike, expressed confidence in Washington's tough stance, saying that sanctions "are beginning to have their impact and they are the right start."

The two also discussed diplomatic efforts to end the bloodshed in Syria and the deadlock in efforts to restart peace negotiations with the Palestinians.

Clinton also met Palestinian prime minister Salam Fayyad, but there was no immediate comment from either side on the meeting. She had met Palestinian president Mahmud Abbas in Paris on July 6, at the start of her trip.

The Jerusalem visit came at the end of a 13-day tour of nine countries, with Clinton expected to return to Washington later on Monday.