Egypt's foreign minister paid a rare visit to Jerusalem to try to revive the prospect of a peace agreement between Israel and the Palestinians.
Sameh Shoukry's trip was the first official visit to Israel since 2007, and reflected the strong but low-profile ties that have developed between the two countries in recent years.
After decades of wars followed by a tense peace, Israel has emerged as a discreet ally to Egyptian President Abdel-Fattah el-Sissi.
Peace efforts have made no headway since Israeli Prime Minister Benjamin Netanyahu took office in 2009, and the last round of US-led talks broke down two years ago.
The Palestinians seek the establishment of an independent state in the West Bank, east Jerusalem and the Gaza Strip - lands captured by Israel in the 1967 war.
Mr Netanyahu has endorsed the idea of an independent Palestinian state, but he opposes a return to Israel's pre-1967 borders and has continued to build Jewish settlements on occupied lands.
Speaking at a news conference with Mr Netanyahu, Mr Shoukry said "the vision of the two-state solution is not far-fetched" but rather required "steps to build confidence".
He warned that worsening conditions for Palestinians threatened to undermine prospects for peace.
"The plight of the Palestinian people becomes more arduous every day. And the dream of peace and security moves further out of the Israeli people's reach as long as the conflict continues."
Mr Netanyahu called on the Palestinians "to follow the courageous example of Egypt and Jordan and join us for direct negotiations".
Egypt and Jordan are the only Middle Eastern countries to make peace with Israel.
In particular, the two sides share intelligence in a common battle against Islamic militants operating in Egypt's Sinai desert and the Gaza Strip.
Mr e l-Sissi recently made a high-profile speech calling for a resumption of efforts to bring peace between Israel and the Palestinians.
A senior Palestinian official said Mr el-Sissi has been trying to arrange a meeting between Palestinian President Mahmoud Abbas and Mr Netanyahu.
The Palestinians have been resisting because the Egyptians have not set any parameters for the meeting, and because Mr Netanyahu continues to build settlements, the official said.