If there’s no two-state solution to the Israeli-Palestinian conflict soon, Israel risks becoming “an apartheid state,” Secretary of State John Kerry told a room of influential world leaders in a closed-door meeting Friday.

Senior American officials have rarely, if ever, used the term “apartheid” in reference to Israel, and President Obama has previously rejected the idea that the word should apply to the Jewish state. Kerry's use of the loaded term is already rankling Jewish leaders in America—and it could attract unwanted attention in Israel, as well.

It wasn't the only controversial comment on the Middle East that Kerry made during his remarks to the Trilateral Commission, a recording of which was obtained by The Daily Beast. Kerry also repeated his warning that a failure of Middle East peace talks could lead to a resumption of Palestinian violence against Israeli citizens. He suggested that a change in either the Israeli or Palestinian leadership could make achieving a peace deal more feasible. He lashed out against Israeli settlement-building. And Kerry said that both Israeli and Palestinian leaders share the blame for the current impasse in the talks.

Kerry also said that at some point, he might unveil his own peace deal and tell both sides to “take it or leave it.”

“A two-state solution will be clearly underscored as the only real alternative. Because a unitary state winds up either being an apartheid state with second-class citizens—or it ends up being a state that destroys the capacity of Israel to be a Jewish state,” Kerry told the group of senior officials and experts from the U.S., Western Europe, Russia, and Japan. “Once you put that frame in your mind, that reality, which is the bottom line, you understand how imperative it is to get to the two-state solution, which both leaders, even yesterday, said they remain deeply committed to.”

According to the 1998 Rome Statute, the “crime of apartheid” is defined as “inhumane acts… committed in the context of an institutionalized regime of systematic oppression and domination by one racial group over any other racial group or groups and committed with the intention of maintaining that regime.” The term is most often used in reference to the system of racial segregation and oppression that governed South Africa from 1948 until 1994.

Former president Jimmy Carter came under fire in 2007 for titling his book on Middle East peace Palestine: Peace or Apartheid. Carter has said publicly that his views on Israeli treatment of the Palestinians are a main cause of his poor relationship with President Obama and his lack of current communication with the White House. But Carter explained after publishing the book that he was referring to apartheid-type policies in the West Bank, not Israel proper, and he was not accusing Israel of institutionalized racism.

“Apartheid is a word that is an accurate description of what has been going on in the West Bank, and it’s based on the desire or avarice of a minority of Israelis for Palestinian land,” Carter said.

Leading experts, including Richard Goldstone, a former justice of the South African Constitutional Court who led the United Nations fact-finding mission on the Gaza conflict of 2008 and 2009, have argued that comparisons between the Israeli treatment of the Palestinians and “apartheid” are offensive and wrong.

“One particularly pernicious and enduring canard that is surfacing again is that Israel pursues ‘apartheid’ policies,” Goldstone wrote in The New York Times in 2011. “It is an unfair and inaccurate slander against Israel, calculated to retard rather than advance peace negotiations.”

In a 2008 interview with Jeffrey Goldberg, then-Sen. Barack Obama shot down the notion that the word “apartheid” was acceptable in a discussion about Israel’s treatment of the Palestinians:

“There’s no doubt that Israel and the Palestinians have tough issues to work out to get to the goal of two states living side by side in peace and security, but injecting a term like apartheid into the discussion doesn’t advance that goal,” Obama said. “It’s emotionally loaded, historically inaccurate, and it’s not what I believe.”

State Department spokeswoman Jen Psaki told The Daily Beast that Kerry was simply repeating his view, shared by others, that a two-state solution is the only way for Israel to remain a Jewish state in peace with the Palestinians.

“Secretary Kerry, like Justice Minister Livni, and previous Israeli Prime Ministers Olmert and Barak, was reiterating why there's no such thing as a one-state solution if you believe, as he does, in the principle of a Jewish State. He was talking about the kind of future Israel wants and the kind of future both Israelis and Palestinians would want to envision,” she said. “The only way to have two nations and two peoples living side by side in peace and security is through a two-state solution. And without a two-state solution, the level of prosperity and security the Israeli and Palestinian people deserve isn't possible.”

But leaders of pro-Israel organizations told The Daily Beast that Kerry’s reference to “apartheid” was appalling and inappropriately alarmist because of its racial connotations and historical context.

“One particularly pernicious and enduring canard that is surfacing again is that Israel pursues ‘apartheid’ policies,” Goldstone wrote in The New York Times in 2011. “It is an unfair and inaccurate slander against Israel, calculated to retard rather than advance peace negotiations.”

Yet Israel’s leaders have employed the term, as well. In 2010, for example, former Prime Minister and Defense Minister Ehud Barak used language very similar to Kerry’s. “As long as in this territory west of the Jordan River there is only one political entity called Israel it is going to be either non-Jewish, or non-democratic,” Barak said. “If this bloc of millions of ­Palestinians cannot vote, that will be an apartheid state.”

“While we’ve heard Secretary Kerry express his understandable fears about alternative prospects for Israel to a two-state deal and we understand the stakes involved in reaching that deal, the use of the word ‘apartheid’ is not helpful at all. It takes the discussion to an entirely different dimension,” said David Harris, executive director of the American Jewish Committee, an organization that has been supportive of Kerry’s peace process initiative. “In trying to make his point, Kerry reaches into diplomatic vocabulary to raise the stakes, but in doing so he invokes notions that have no place in the discussion.”

Kerry has used dire warnings twice in the past to paint a picture of doom for Israel if the current peace process fails. Last November, Kerry warned of a third intifada of Palestinian violence and increased isolation of Israel if the peace process failed. In March, Democrats and Republican alike criticized Kerry for suggesting that if peace talks fail, it would bolster the boycott, divestment and sanctions (BDS) movement against Israel.

“It’s in the Palestinian playbook to tie Israel to these extreme notions of time being on the Palestinian side, that demographics are on the Palestinian side, and that Israel has to confront notions of the Jewishness of the state,” Harris said.

Kerry on Friday repeated his warning that a dissolution of the peace process might lead to more Palestinian violence. “People grow so frustrated with their lot in life that they begin to take other choices and go to dark places they’ve been before, which forces confrontation,” he said.

The secretary of state also implied, but did not say outright, that if the governments of Israeli Prime Minister Bibi Netanyahu or Palestinian Authority President Mahmoud Abbas left power, there could be a change in the prospects for peace. If “there is a change of government or a change of heart,” Kerry said, “something will happen.”

Kerry criticized Israeli settlement construction as being unhelpful to the peace process and he also criticized Palestinian leaders for making statements that declined to recognize the right of Israel to exist as a Jewish state.

“There is a fundamental confrontation and it is over settlements. Fourteen thousand new settlement units announced since we began negotiations. It’s very difficult for any leader to deal under that cloud,” Kerry said.

He acknowledged that the formal negotiating process that he initiated and led since last summer may soon stop. But he maintained that his efforts to push for a final settlement will continue in one form or another.

“The reports of the demise of the peace process have consistently been misunderstood and misreported. And even we are now getting to the moment of obvious confrontation and hiatus, but I would far from declare it dead,” Kerry said. “You would say this thing is going to hell in a handbasket, and who knows, it might at some point, but I don’t think it is right now, yet.”

Kerry gave both Israeli and Palestinian leaders credit for sticking with the peace process for this long. But he added that both sides were to blame for the current impasse in the talks; neither leader was ready to make the tough decisions necessary for achieving peace.

“There’s a period here where there needs to be some regrouping. I don’t think it’s unhealthy for both of them to have to stare over the abyss and understand where the real tensions are and what the real critical decisions are that have to be made,” he said. “Neither party is quite ready to make it at this point in time. That doesn’t mean they don’t have to make these decisions.”

Kerry said that he was considering, at some point, publicly laying out a comprehensive U.S. plan for a final agreement between the Israelis and the Palestinians, in a last-ditch effort to forge a deal before the Obama administration leaves office in 2017.

“We have enough time to do any number of things, including the potential at some point in time that we will just put something out there. ‘Here it is, folks. This is what it looks like. Take it or leave it,’” Kerry said.