Guterres spoke after meeting Palestinian prime minister Rami Hamdallah in Ramallah following talks with Israeli leaders the previous day.
"I want to express very strongly the total commitment of the United Nations but my personal total commitment to do everything for a two-state solution to materialise," he said.
"I have said several times there is no Plan B to a two-state solution."
A two-state solution to the conflict has been the basis of international diplomacy since at least the early 1990s, but it has recently come under threat.
Israeli Prime Minister Benjamin Netanyahu heads what is seen as the most right-wing government in his country's history, and has signalled he has no intention of evacuating settlements in the West Bank.
Israeli settlements are built on land the Palestinians see as part of their future state.
UN Secretary General Antonio Guterres lays a wreath of flowers on the tomb of the late Palestinian leader Yasser Arafat in Ramallah, 29 August 2017. Source: AAP
Prominent members of Netanyahu's government advocate annexing most of the West Bank, which would make an independent Palestinian state impossible.
US President Donald Trump has said he wants to reach the "ultimate deal", but he himself has cast doubt on the two-state solution, saying he could support a single state if this meant peace.
Such statements deeply concern Palestinian leaders.
Guterres spoke Tuesday of Israeli settlements as a "major obstacle" to peace, while also noting that they are "illegal under international law".
On Monday after meeting Netanyahu, he criticised settlements but also said Palestinians must condemn "terrorism".
He said on Tuesday that "it is important to create conditions for leaders of all sides to appeal for calm, to avoid forms of incitement, for violence to settle down".
Israeli leaders say Palestinian "incitement" against the Jewish state is a key reason why peace efforts have not advanced.
Peace efforts have been at a standstill since a US-led initiative collapsed in 2014.
'Scouting and listening'
Hamdallah called on Guterres to pressure Israel to comply with UN Security Council resolutions, including one in December condemning settlement activity that Netanyahu's government has ignored.
Palestinian president Mahmud Abbas is currently visiting Turkey and was not expected to meet Guterres.
Guterres's visit follows a US delegation's talks with both Netanyahu and Abbas last week. The delegation was led by Trump's son-in-law, Jared Kushner.
Trump aides have held a series of meetings with both sides, portraying them as hearing out concerns before deciding on a way forward.
The US president himself visited Israel and the Palestinian territories in May.
UN Secretary General Antonio Guterres (L) and Israeli Prime Minister Benjamin Netanyahu (R) in Jerusalem, Israel, 28 August 2017. Source: AAP
But Palestinian leaders have grown frustrated with the White House, after initially holding out hope that Trump could bring a fresh approach to peace efforts despite his pledges of staunch support for Israel.
They note the White House has not even clearly committed to a two-state solution to the conflict, in contrast to longstanding US policy.
Hamdallah on Tuesday said the Palestinian leadership was waiting for US officials to formulate a clear approach.
"What the US administration is saying is that they are still scouting and listening," he said.
"But during the last round, (Abbas) brought up settlements and the two-state solution. What is the position of the US administration regarding these two topics?
"So far, the US administration has not responded to these two questions, and promised they will be back in the next few weeks with clarifications and a work plan for the next phase."
Netanyahu on Monday night, after meeting Guterres earlier in the day, again spoke of not removing settlements.
"No uprooting of settlements," he said.
"It's been proven that it doesn't help peace. We uprooted settlements and what did we get? We got rockets," he added, referring to the 2005 Israeli withdrawal from Gaza and subsequent conflicts.
