Mahmoud Abbas, the Palestinian president, responded to Mr. Kerry’s speech by calling on Israel to freeze housing construction in order to restart negotiations. “The minute the Israeli government agrees to cease all settlement activities, including in and around occupied East Jerusalem, and agree to implement the signed agreements on the basis of mutual reciprocity, the Palestinian leadership stands ready to resume permanent status negotiations,” he said.

Mr. Netanyahu has said he is willing to meet Mr. Abbas anytime for talks as long as there are no preconditions.

It was notable that it was Mr. Kerry who delivered the speech rather than President Obama, who has long kept a distance from Middle East peace negotiations, a pursuit he has always doubted would succeed. After talks at Camp David collapsed in 2000, it was President Bill Clinton himself who gave a speech laying out the parameters of an ultimate deal, about 10 days before leaving office in 2001.

At the time, Mr. Clinton also censured Israel for its settlements, but in far more measured terms. Mr. Kerry called them a violation of international law, a position he said the State Department had taken since 1978.

“The Israeli prime minister publicly supports a two-state solution, but his current coalition is the most right-wing in Israeli history, with an agenda driven by its most extreme elements,” he said. “The result is that policies of this government — which the prime minister himself just described as ‘more committed to settlements than any in Israel’s history’ — are leading in the opposite direction, towards one state.”

Seldom in modern American diplomacy has an American administration so directly confronted — and disavowed — a close ally’s actions as Mr. Kerry did on Wednesday, dropping most of the restraint he had shown in public over the past four years. One of the last times was during the Eisenhower administration, when the United States broke with Britain, France and Israel over the 1956 invasion of the Egyptian Sinai. Eisenhower had warned against the invasion and threatened to harm Britain’s financial system in retaliation.