"An all-out war is possible but I think there's also the opportunity - we're still in play to have a settlement that can fundamentally change the whole region," Biden said in an appearance on US broadcaster ABC's The View.
Biden, in New York this week for United Nations General Assembly meetings, has been working to calm tensions as the nearly year-long war between Israel and Palestinian militants Hamas in the Gaza Strip threatens to engulf Lebanon.
Israel widened its air strikes in Lebanon on Wednesday and shot down a missile Hezbollah said it fired at the Mossad spy agency near Tel Aviv.
Clashes between Hamas and Israel war have left many of the Gaza Strip's residents displaced. (AP PHOTO)
The US president, a staunch ally of Israel, has pushed for a two-state solution in the Israel-Palestinian conflict and said he has openly disagreed with Israeli Prime Minister Benjamin Netanyahu on the issue.
"I don't agree with his position. There needs to be a two state solution," Biden said.
"It needs to happen."
Biden said once ceasefires are secured with Hezbollah and in the Gaza Strip, then attention can be turned to the West Bank.
"It's possible, and I'm using every bit of energy I have ... to get this done. There's a desire to see change."
The Hamas-Israel war is approaching the one-year mark on October 7 when Hamas invaded southern Israel, and has caused tens of thousands of deaths, the majority being of Palestinians in the Gaza Strip and left many of the enclave's residents displaced.
The US was spearheading a new diplomatic effort to end hostilities in both the Gaza Strip and Lebanon, linking the two conflicts as part of a single initiative, six sources familiar with the initiative told Reuters.
Details are being hammered out at the United Nations General Assembly in New York, according to diplomats and officials.
Three Israeli officials told Reuters that the United States and France were working on ceasefire proposals but that no significant process had been made so far.
It would be the first time the two fronts are linked as part of a US diplomatic push, the sources said.
The deal may eventually lead to the release of hostages seized by Palestinian armed group Hamas in the attack on Israel on October 7 last year that sparked hostilities across the Middle East, according to several sources.
A senior Lebanese official and a source familiar with Hezbollah's thinking told Reuters that Hezbollah was "open to any settlement that would include both Gaza and Lebanon".
A second Lebanese official said that it would be "impossible" to stop the conflicts without putting together "a package".
with AP
