It follows her meeting with Egyptian President Hosni Mubarak, a key US ally who has been a major player in trying to bring Israel and the Palestinians back to the negotiating table.
At a press conference in Cairo, Ms Rice urged Palestinians to form a government that will respect principles set out by world powers in an effort to relaunch the stalled peace process.
"They need a government that can engage the international community and can engage the broad consensus that a two-state solution is the answer,” Ms Rice said.
"We talked about how to help (Palestinian president Mahmud Abbas) in terms of a Palestinian government and a Palestinian authority that is fully committed to the Quartet principles," she said of her meetings with Egyptian officials and ministers from the Gulf Cooperation Council.
The Middle East quartet -- the European Union, Russia, United Nations and United States -- drafted the so-called "roadmap" that envisions an independent Palestinian state living side by side in peace with Israel.
Ms Rice also expressed her "great concern" over fighting between Palestinian factions loyal to Hamas and supporters of Abbas's Fatah party.
Peace plan
Ahead of Ms Rice's visit to Israel, a cabinet minister from Prime Minister Ehud Olmert's Kadima party said Israel should accept a Saudi peace plan adopted by the Arab League in 2002.
"We should take the bull by the horns and, when I say that, I mean we should accept the moderate (Arab) countries' initiative, the Saudi initiative," Justice and Housing Minister Meir Sheetrit told public radio.
He said Israel would be willing to withdraw from Arab territory occupied since the 1967 Middle East war, as stipulated in the Saudi blueprint, in exchange for a "complete peace".
"We should invite Abu Mazen (Mahmud Abbas) for face to face talks," he said, emphasising that Israel was "ready to make significant compromises to draw its permanent borders".
In Israel, Ms Rice will meet with Mr Olmert and Foreign Minister Tzipi Livni, before heading for talks with Abbas.