Speaking at the US-Islamic World Forum in Washington on Tuesday, the top US diplomat said President Barack Obama would in coming weeks lay out in detail American policy towards a changing Middle East.
But she said America remained determined to move forward talks between Israel and the Palestinians, warning that regime change in Arab countries was a reminder that the Middle East conflict continued to fester.
"The status quo between Palestinians and Israelis is no more sustainable than the political systems that have crumbled in recent months," Clinton said.
"Neither Israel's future as a Jewish democratic state nor the legitimate aspirations of Palestinians can be secured without a negotiated two-state solution.
"And while it is a truism that only the parties themselves can make the hard choices necessary for peace, there is no substitute for continued active American leadership."
Negotiations between Israel and the Palestinians have been on hold since late 2010, shortly after they restarted when an Israeli moratorium on new West Bank settlement building expired.
Israel has refused to renew the ban, and the Palestinians say they will not negotiate while settlers build on land they want for a future state.
Clinton's comments came as diplomats at the United Nations said Washington had blocked a European-led initiative to try to relaunch peace talks between the two sides. Britain, France and Germany had planned to propose the outlines of a final peace agreement during a meeting of the diplomatic Quartet on the Middle East scheduled for Friday in Berlin.
The three nations have been pressing for a Quartet statement, setting out the framework for a deal, including borders and a land swap, which they hoped would revive direct talks between Israel and the Palestinians.
Highlighting the trio's disappointment, a European diplomat said: "We think it would have been high time for the Quartet to have a strong political message out there, so we regret this meeting will not take place."
"There is increasing frustration on the Palestinian side," said a diplomat from another European Union nation. Both diplomats spoke on condition of anonymity.
The Palestinian's UN envoy, Riyad Mansour, told AFP the three states "have been working at the highest level for the acceptance of these parameters to pave the way for the resumption of direct talks. It appears that Washington is not yet ready to accept this outline," he said.
"It is very unfortunate."