French President Francois Hollande on Monday demanded an end to Jewish settlement activity and told the Israeli parliament Jerusalem must one day be the capital of two states.
He also vowed that France would not allow sanctions on Iran to be lifted without assurances Tehran has "definitively renounced" alleged plans to develop a nuclear weapons capability.
Affirming his own commitment to the two-state solution, Israel's Prime Minister Benjamin Netanyahu called on Palestinian leader Mahmud Abbas to address Israel's parliament.
After a visit to the West Bank city of Ramallah in which Hollande made an unequivocal demand for Israel to stop building on land seized in the 1967 Six-Day War, the French leader returned to Jerusalem to drive home his message from the podium of the Knesset.
"Settlement activity must stop because it compromises the two-state solution," he told his audience, which included Prime Minister Benjamin Netanyahu, President Shimon Peres and the 120-member parliament.
"France's position is known: a negotiated settlement, with the state of Israel and (the future state) of Palestine both having Jerusalem as capital, coexisting in peace and security."
Israel seized mostly Arab east Jerusalem during the 1967 war and later annexed it in a move never recognised by the international community. It views the entire city as its "eternal and indivisible capital."
The Palestinians want east Jerusalem as capital of their future state, making the city's fate one of the thorniest issues of the decades-long conflict.
Netanyahu insisted he accepted "the solution of two states for two peoples in the framework of real peace," while acknowledging: "Not all the MPs in this house agree with me."
"I call on (Abbas) from here today: let's break the deadlock: Come to the Israeli Knesset and I'll come to Ramallah. Get up on this platform and recognise the historical truth: the Jews have a nearly 4,000-year-old link to the land of Israel."
The latest peace talks, launched at Washington's urging in July, have shown little sign of progress, with the Palestinians objecting to repeated Israeli announcements of new settlement construction on occupied territory.
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A major spike in settlement announcements last week prompted the resignation of the entire Palestinian negotiating team.
But on Sunday Abbas told AFP that peace talks with Israel would continue for the full nine months agreed with Washington -- "regardless of what happens on the ground."
Iran must take 'concrete, verifiable steps'
On the Israeli side, most of Hollande's visit has been focused on the upcoming world talks with Iran over its contested nuclear programme.
"We will maintain the sanctions as long as we are not certain that Iran has definitively and irreversibly renounced its military programme to obtain nuclear weapons," he told the Knesset.
"France will not let Iran arm itself with nuclear weapons."
The P5+1 group of world powers, which includes France, is to resume talks with Iran in Geneva on Wednesday seeking an interim agreement which would curb Tehran's nuclear programme in exchange for some sanctions relief.
Israel has actively campaigned against the mooted deal, arguing that the sanctions should be kept in place or even strengthened to force Iran to drastically scale back its programme, which the Jewish state views as a threat to its existence.
Israel, along with many Western nations, suspects Iran is seeking a nuclear weapons capability alongside its civilian programme, allegations denied by Tehran.
Hollande said the P5+1 had so far made "credible and solid proposals" in the negotiations, and that now it was up to Iran to respond with "concrete and verifiable steps."
A previous round of talks ended on November 10 without agreement, with France taking a tougher stance than its Western partners in a move which won glowing praise in Israel.