Nicholson's visit comes at a time when Israel faces increasing international criticism over its policies and the deadlock in peace talks with the Palestinians.
Last week, Israel fended off a Palestinian attempt to expel it from FIFA.
On Tuesday, President Barack Obama told an Israeli TV station that the world is skeptical about Israeli Prime Minister Benjamin Netanyahu's commitment to peace.
Nicholson told Netanyahu on Wednesday that "we understand that Israel's neighbourhood is as dangerous as Canada's is peaceful."
Canada and Israel are close allies.
Nicholson, who took on the foreign affairs portfolio in February, is meeting with both Israeli and Palestinian officials during his three-day visit.
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