Israel must do more to pursue peace with the Palestinians and to strengthen their institutions or risk empowering militant groups such as Hamas, U.S. Secretary of State Hillary Clinton said on Thursday.

Israel cannot avoid the difficult choices required to achieve peace with the Palestinians - but President Barack Obama's administration will not force the two sides into a deal, Clinton said.

In a speech at the opening of the Daniel Abraham Center for Middle East Peace, a think tank, Clinton said that improved security had given some Israelis the false impression that a peace settlement could be postponed.

While Clinton said that the Palestinians should also promote peace by ending incitement, curbing corruption and refraining from inflammatory rhetoric, she appeared to put more responsibility on Israel.

"For Israel, accepting concrete steps toward peace - both through the peace process and in the bottoms-up institution building I have described - are the best weapons against Hamas and other extremists," Clinton said.

"Those who benefit from our failure of leadership traffic in hate and violence and give strength to Iran's anti-Semitic president (Mahmoud Ahmadinejad) and extremists like Hamas and Hezbollah," she added.

"Israel has worked hard in recent years to improve security, and, along with the increased capacity and commitment of Palestinian security forces, the number of suicide bombings has - thankfully - dropped significantly," Clinton said.

"As a result, however, some have come to believe that Israelis, protected by walls and buoyed by a dynamic economy, can avoid the hard choices that peace requires."

Yet failing to address the need for peace talks could be disastrous, Clinton warned.

"[It] would mean continuing an impasse that carries tragic human costs, denies Palestinians their legitimate aspirations, and threatens Israel's long term future as a secure and democratic Jewish state," she said.

"Israelis and Palestinians alike must confront the reality that the status quo has not produced long-term security or served their interests, and accept their share of responsibility for reaching a comprehensive peace that will benefit both sides."

While outlining the United States' goal of an end to the conflict, Clinton offered the government of Prime Minister Benjamin Netanyahu reassurance that the U.S. would not impose a settlement on the Middle East.

"We know that we cannot force a solution. The parties themselves must resolve their differences," she said.

She added: "But we believe that through good-faith negotiations, the parties can mutually agree to an outcome which ends the conflict and reconciles the Palestinian goal of an independent and viable state based on the '67 lines, with agreed swaps, and Israel's goal of a Jewish state with secure and recognized borders that reflect subsequent developments and meet Israel's security requirements."

Palestinian President Mahmoud Abbas recently pulled out scheduled U.S.-mediated peace talks in protest at Israeli plans to build Jewish homes beyond the Green Line in East Jerusalem.