(Stretched circle $\Rightarrow$ Ellipse with focis)
It's easy to show that projection of a diagram at an angle is the same as stretching. Let $E$ be a stretched circle, then it is not hard to find the corresponding angle s.t. $E$ is the projection of a circle $C$ at that angle.
Let $C_0$ be the unqiue cyclinder s.t. it contains the circle and it is normal to the plane containing the circle. Clearly $E$ is the intersection of $C_0$ with the plane containing $E$.
And there is a classical proof showing that the intersection of a cyclinder with a plane is an ellipse with focis, see @Element118 's answer.
(Ellipse with focis $\Rightarrow$ Stretched circle)
Let $E$ be an ellipse with focis $F_1,F_2=(\pm c,0,0)$, center $O=(0,0,0)$, major axis $2a$ and minor axis $2b$ sitting on the plane $z=0$. Clearly $a^2=b^2+c^2$.
Consider two spheres of radius $b$ and centers respectively $(c,0,b)$ and $(-c,0,-b)$ as the following diagram.
There exists an unique cyclinder $C_0$ inscribing both of the spheres. Clearly $C_0\cap \{z=0\}$ is an ellipse $E_1$ with focis $F_1$ and $F_2$ due to the classical proof mentioned above.
To prove that $E_1=E$, it reduces to showing that $OM=a$, which is equivalent to showing that $\angle OAM=\angle OMA$. Since $\angle OAM = \angle AMJ$, it reduces to showing $\angle OMA=\angle AMJ$ which is clearly true. Thus $E_1=E$.
And we clearly have that $E$ is the projection of a circle, which is the same as a stretched circle. The result follows.