Mr Kerry says the United States cannot stay silent as violence and Israeli settlements risk undermining peace.
Israel's prime minister, Binyamin Netanyahu, has hit back at the comments, accusing Mr Kerry of bias against the Jewish state.
Kerry blasts Israel as Obama administration nears end
Israeli prime minister Binyamin Netanyahu responds Source: AAP
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United States secretary of state John Kerry has warned the future of a two-state solution to the enduring Israeli-Palestinian conflict is in serious jeopardy.
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