"Israel's security is undeniably in our interest to make sure it is absolutely secure," the vice president said.
Biden called the Israeli announcement of new settlements last week "provocative" and said it was "obviously designed by some in Israel to undermine a peace process George Mitchell finally got -- our negotiator -- finally got back on track."
"And so the message is: We've got to get over this," Biden said. "Granted, I condemn the announcement made by that planning council. ... The irony is even that planning council acknowledging not a single new unit can be built at least for a year and maybe never will be built, it was provocative."
Biden denied a report that said he told Israeli Prime Minister Benjamin Netanyahu that Israel's position on settlements puts U.S. troops at risk.
"No, I never said that," the vice president said.
At home, Biden thinks the Democratic Party's electoral prospects in this year's midterm elections are not as dire as the conventional wisdom holds because Democrats will check off several big-ticket agenda items over the next eight months.
"I think they're going to be a heck of a lot less than all of you think," Biden said.
The vice president candidly acknowledged, though, the historic downward trends for the party that holds the White House in a midterm election year.
"I think you're going to suffer traditional losses that occur in an off year," he said.
Biden said there were three key reasons he was optimistic about the Democrats chances in November -- Iraq, job creation and health care.
"I think we're going to see significant success in Iraq with 90,000 troops home," Biden said, referring to a planned drawdown by August.
To highlight the administration's efforts to create green jobs, Biden traveled to Durham, N.C., today and toured a manufacturing plant that benefitted from the stimulus bill.
Biden, who's become the president's point man on the middle class and who is overseeing the Middle-Class Task Force and the administration's Recovery Act, said the nation's largest banks are not doing enough for the American people.
He said the Obama administration is trying to focus on small community banks to encourage lending and jump start the economy on Main Street.
"You've got to give the banks, the small banks, the capital to be able to lend ... to get themselves in the position where they feel secure they can lend to you," Biden said. "We've got to jump start the economy. But you know, it's hard. When you don't have a job, man, when you don't have a job, it's a depression."
Earlier today, Biden said he was "optimistic" about the prospects of health care legislation passing and said he was going to spend time today on the phone lobbying wavering Democratic members of Congress to support health care reform.
"When I'm not with you," the vice president joked to Tapper as he prepared to board Air Force Two for the flight to North Carolina, "I'm gonna be in that cabin" on the phone.