US Secretary of State John Kerry is calling on Israel and Palestine to continue working on a peace deal. Israeli Prime Minister Benjamin Netanyahu says the American diplomat is paying lip-service to terrorism against Israel.

Kerry: Two-state solution in jeopardy

John Kerry is stepping away from the white-hot furnace of Middle East diplomacy with a warning to all concerned. In a farewell speech at the U.S. State Department, the secretary of state said the vision of Israel and a future Palestinian state living side-by-side in peace is in jeopardy.

"President Obama and I know that the incoming administration has signaled that they may take a different path, and even suggested breaking from the longstanding U.S. policies on settlements, Jerusalem and the possibility of a two-state solution," said John Kerry, US Secretary of State.

"That is for them to decide. That's how we work. But we cannot - in good conscience - do nothing, and say nothing, when we see the hope of peace slipping away."

Kerry's own efforts to broker a deal were abandoned in 2014, leading to an extended period of tension between the U.S. and Israel.

That culminated in last week's decision by the Obama administration to avoid wielding a U.S. veto at the U.N. Security Council which voted to condemn continued Israeli settlement construction.

Prime Minister Netanyahu says the current administration is unwilling to acknowledge the reality of multiple threats to Israel's security.

"Secretary Kerry paid lip service to the unremitting campaign of terrorism that has been waged by the Palestinians against the Jewish state for nearly a century," he said.

"What he did was to spend most of his speech blaming Israel for the lack of peace by passionately condemning a policy of enabling Jews to live in their historic homeland and in their eternal capital Jerusalem."

President-elect Donald Trump is expressing strong support of Netanyahu, including mutual opposition to the Iran deal, tweeting.