The United States and Israel said on Thursday that they see Iran as the greatest challenge in the Middle East.

The two countries met in Washington for their semi-annual strategic dialogue in which they covered many subjects, but stressed that "It is clear that Iran is the greatest challenge we face today in the Middle East."

"Iran's continued noncompliance with its international obligations related to its nuclear program, as well as its continued support for terrorist organizations, are of grave concern to our two countries and the entire international community," U.S. Deputy Secretary of State William Burns and Israeli Deputy Foreign Minister Daniel Ayalon, who headed their separate delegation for the dialogue, said in a joint statement.

"Continued efforts by the international community are critical to bringing about change in Iranian behavior and preventing Iran from developing a nuclear weapons capability," they added.

The U.S. is pursuing a sanctions-plus-diplomatic approach toward Iran's nuclear program, which the Islamic republic insists is for peaceful purpose, despite a report by the International Atomic Energy Agency early last month pointing to its clandestine activities towards acquiring nuclear weapons.

Israeli Defense Minister Ehud Barak said on Thursday that a nuclear Iran is unacceptable, and Israel is determined to stop it with "all options on the table."