WASHINGTON, March 22 (Reuters) - US Secretary of State Hillary Clinton said on Monday that Israel faces difficult but necessary choices on the road to Mideast peace because the status quo with the Palestinians is unsustainable. (Watch the speech here...)

The status quo is unsustainable for all sides. It promises only violence and unrealized aspirations, Clinton said in excerpts of a speech released by her office and scheduled for delivery at 9 a.m. EDT/1300 GMT to an influential pro-Israel lobby group.

There is another path. A path that leads toward security and prosperity for all the people in the region. It will require all parties -- including Israel -- to make difficult but necessary choices, Clinton said.

Clinton's speech, coming after a row over an Israeli announcement of plans for new Jewish settlements that rocked the U.S.-Israel relationship, underscored the Obama administration's rock solid commitment to Israel's security and its future.

Guaranteeing Israel's security is more than a policy position for me. It is a personal commitment that will never waver, Clinton said in the excerpts of the speech to the pro-Israel lobby group AIPAC.

But she said it was the United States' duty to tell the truth when it is needed and urged Israel to take steps to end the conflict with the Palestinians, which she said threatens Israel's long-term future as a secure and democratic Jewish state.

Israeli Prime Minister Benjamin Netanyahu is expected to address the same group later on Monday. Netanyahu, before departing for Washington, said he had informed U.S. leaders that Israel would not stop the construction of Jewish settlements around Jerusalem.

Israel's announcement of new settlement construction during a visit this month by U.S. Vice President Joe Biden angered Washington and threatened to pull the plug on just-launched indirect talks between Israel and the Palestinians.

U.S. special Mideast envoy George Mitchell is currently in the region attempting to restart the talks.

Clinton said the United States would continue to demand that Hamas, the Islamist Palestinian group that controls the Gaza Strip, renounce violence and recognize Israel. She also repeated U.S. calls for the release of captured Israeli soldier Gilad Shalit, according to the speech excerpts.

Clinton's speech also highlighted the threat posed by Iran's nuclear program, which the United States and other Western members of the Security Council are seeking to target with a fresh round of U.N. sanctions.

Clinton said a nuclear-armed Iran would embolden its terrorist clientele and could spark an arms race that could destabilize the region.

That is unacceptable. Unacceptable to the United States. Unacceptable to Israel. And unacceptable to the international community.

Clinton said the United States was determined to work with its partners in the U.N. Security Council to show Iran's leaders that there are consequences to intransigence on the dispute over its nuclear program, which Tehran insists is purely for peaceful purposes.

Our aim is not incremental sanctions, but sanctions that will bite, Clinton said, adding that it is taking time to reach agreement but that this is a worthwhile investment for winning the broadest possible support for our efforts. (Reporting by Andrew Quinn; Editing by Eric Walsh)