WASHINGTON D.C. - In unprecedented and harsh criticism of Israeli government policy, U.S. Secretary of State John Kerry said on Sunday that Israel must choose between settlement construction in the West Bank and a two-state solution.

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Addressing the Saban Forum in Washington, D.C., Kerry started off by saying he considers himself an "unapologetic friend of Israel" who is concerned for Israel's safety and security.

When it comes to the Israeli-Palestinian conflict however, Kerry said that "things are moving in the wrong direction" and there is "no status quo."

John Kerry addresses the Saban Forum in Washington, D.C. Credit: YouTube

The Israeli government does not favor a two-state solution, Kerry said, and therefore the U.S. faces an uphill battle. Israel "is ignoring all our warnings regarding settlements."

Contradicting Netanyahu, Kerry said that peace with the Palestinians is a pre-condition to peace between Israel and the Arab world. Netanyahu, who addressed the forum earlier, suggested that only a deal between Israel and the Arab world could bring the Palestinians to the negotiating table.

Kerry said that continued settlement construction narrows the prospects of peace, but noted that the "tipping point regarding the two-state solution" has not been crossed.

Contrary to recent reports, Kerry said that the U.S. administration has not decided whether to back a UN action concerning the Israeli-Palestinian conflict, but noted that the U.S. "will not support an unfair resolution."

He noted that Washington has never suggested any measure that would impose a solution on Israel, but said that any Israeli withdrawal from the West Bank would be a gradual one to ensure the situation in the territory does not mirror the one in Gaza.

Earlier, Netanyahu told the forum that Israel remains committed to preventing Iran from acquiring nuclear weapons. Iran had become even more aggressive since the signing of a nuclear agreement with world powers last year, Netanyahu said, stressing that he intended to discuss the Iran issue with U.S. President-elect Donald Trump once he assumes office.

Speaking on the so-called alt-right movement, Netanyahu said that "there is always anti-Semitism on the ultra-right and ultra-left," adding that he believes "the U.S. is a healthy democracy."

On the Palestinian issue, Netanyahu said he still believes a two-state solution can be reached, but reiterated his position that the Palestinian must recognize Israel as the Jewish nation-state. Netanyahu suggested that a peace agreement could be advanced through a regional deal, and added that dictates will not bring peace.