The upbeat appraisal from Oren flew in the face of recent tensions and came after President Barack Obama refused to back down in a row over Jewish settlements that has driven a wedge between the two allies.
"We have an Arab world where most of Arab leaders view another country, Iran, as the greatest threat facing them, not the state of Israel. We have a Palestinian leadership which as I said earlier is committed to the peace process," said Oren.
"We have an Israeli government which is very deep, very widely represented, very stable, capable of making those hard decisions. And we have President Obama, a person who is personally committed to this process."
The rupture in US-Israeli relations occurred last month when Israeli officials announced plans to build 1,600 Jewish settlements in annexed east Jerusalem, embarrassing the visiting US Vice President Joe Biden.
The Palestinians see east Jerusalem as the capital of their promised state, and refuse to resume direct negotiations with Israel without a complete freeze of settlement construction in the occupied territories.
Israeli officials have said that the decision to announce the settlement move during Biden's visit was not approved by Prime Minister Benjamin Netanyahu.
"We understand that the timing of announcements, such as the announcements of this particular project, should be under the control of the prime minister's office," said Oren.
"It's not easy. The prime minister of Israel, he's not the mayor of Jerusalem. He's got a country to run. And he knows no more about what's being built on every street in Jerusalem than the president of the United States would know what's being built in any, you know, city, any street in Washington, DC, or New York."
The White House failed to end the row during Netanyahu's visit to Washington last month, and the prime minister returned home to a torrent of media derision after he was deprived of the normal trappings granted to a visiting leader.
The Israelis and the Palestinians agreed earlier last month to hold US-brokered indirect talks, but the plan to build new settler homes in east Jerusalem cast doubts over the agreement.
Direct negotiations have been frozen since Israel launched a 22-day military offensive in the Gaza Strip in December 2008 in a bid to halt rocket attacks from the Palestinian territory ruled by the Islamist Hamas movement.
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