Israeli leader Benjamin Netanyahu has condemned as biased a speech by outgoing US Secretary of State John Kerry on Israeli-Palestinian issues.
Mr Kerry said the prospect of a peace deal based on a two-state solution was in grave jeopardy.
Israeli settlement building on occupied land was a major problem, he said.
Mr Netanyahu said he was disappointed with the speech, which he said was "unbalanced" and "obsessively focused" on settlements.
Mr Kerry had "paid lip service to the unremitting Palestinian campaign of terrorism" against Israel, he said.
He added that the conflict centred on the Palestinians' refusal to recognise Israel's right to exist, but Mr Kerry "does not see the simple truth".
Earlier, US President-elect Donald Trump tweeted in support of Israel, saying he would not allow it to be treated with "disdain and disrespect".
He urged Israel to "stay strong" until he assumed office next month.
France, which will host an international conference to lay down the framework for a future peace deal between Israel and the Palestinians in Paris in January, indicated support for Mr Kerry's position.
The French Foreign Minister, Jean-Marc Ayrault, said Mr Kerry's speech was "clear, committed and courageous".
Following the speech, Palestinian Authority President Mahmoud Abbas suggested he was ready to resume peace negotiations if Israel stopped activity within its settlements.
The chief Palestinian negotiator, Saeb Erekat, said President Abbas was "fully confident" that a "just, comprehensive, and lasting solution" could be reached.
"If the Israeli Government agrees to cease settlement activity, including in East Jerusalem, and to implement the agreements signed by the two sides, the Palestinian leadership will be willing to resume negotiations," he said.
On Friday, the US chose not to veto a UN Security Council resolution calling for an end to Israeli settlement construction, leading to an angry response from Israel.
The issue of Jewish settlements is one of the most contentious between Israel and the Palestinians, who see them as an obstacle to peace and the creation of a viable Palestinian state.
More than 500,000 Jews live in about 140 settlements built since Israel's 1967 occupation of the West Bank and East Jerusalem. The settlements are considered illegal under international law, though Israel disputes this.
What is the two-state solution?
A "two-state solution" to the decades-old conflict between Israelis and Palestinians is the declared goal of their leaders and many international diplomats and politicians.
It is the shorthand for a final settlement that would see the creation of an independent state of Palestine within pre-1967 ceasefire lines in the West Bank, Gaza Strip and East Jerusalem, living peacefully alongside Israel.
The United Nations, the Arab League, the European Union, Russia and the United States routinely restate their commitment to the concept.
In his speech, Mr Kerry said that despite Israeli claims to the contrary, UN condemnation of illegal Jewish settlements on occupied land was in line with American values.
"The two-state solution is the only way to achieve a just and lasting peace between Israelis and Palestinians. It is the only way to ensure Israel's future as a Jewish and democratic state. That future is now in jeopardy," he said.
He added: "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 the most extreme elements.
"The result is that policies of this government, which the prime minister himself just described as more committed to settlements than any Israel's history, are leading in the opposite direction. They are leading towards one state."
More to come? By Paul Adams, BBC diplomatic correspondent
Barack Obama began his presidency with a flurry of diplomacy aimed at breaking the Arab-Israeli deadlock. It did not work and pretty soon, a succession of Arab revolutions and wars gave the president more pressing things to think about.
Now, at the eleventh hour, another flurry, which has angered Israeli Prime Minister Benjamin Netanyahu.
But could it help set the scene for future diplomacy? France is organising a peace conference in mid-January and it has been suggested that decisions taken there could form the basis of another UN resolution before 20 January, when President Obama leaves office.
However, Donald Trump has made it clear he has no plans to push Israel into a corner.