In a speech peppered with expressions in Hebrew, Cameron mentioned his own Jewish ancestors and Britain's crucial role in Israel's establishment.
While voicing support for US-led peace talks, Cameron mostly steered clear of Israeli policies that have drawn fire, with only passing criticism of West Bank settlement construction.
He did not offer advice, a common practice of visiting leaders which many Israelis find annoying, but rather asked Israelis to "imagine" the benefits of peace.
The reassuring words were welcomed in Israel, which has come under some tough criticism in Europe.
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The United States and European Union consider settlement construction illegal or illegitimate, and have warned that Israel could face growing isolation if the current round of peace talks with the Palestinians set to end next month fails.
Buoyed by the Palestinian-led movement calling for a boycott, divestment and sanctions against Israel, some businesses and pension funds in Europe have recently cut investments or trade with Israeli firms they say are connected to West Bank settlements.
Israel charges the boycott has strong anti-Semitic connotations and is meant to legitimise the Jewish state as a whole, and not merely a pressure tactic against its policies toward the Palestinians.
For many Israelis, the boycott conjures up dark images of the Nazi boycott prior and during WWII when Jewish academics were kicked out of universities and Jewish businesses were vandalised and boycotted.