Kerry arrived in Israel Tuesday night and has met twice with both Netanyahu and Palestinian President Mahmoud Abbas.
Netanyahu Wednesday accused the Palestinians of creating an artificial crisis.
While visiting Bethlehem, Kerry pledged $75 million in aid to the Palestinians and said Washington considers all settlements illegitimate. His words served to further boost Palestinian claims Israel is operating against the terms set for the current peace talks by linking settlement construction to the release of 104 Palestinian prisoners. To date Israel has released 52 Palestinians in two batches.
The Jerusalem Post, quoting Israeli government officials, reported while Israel agreed to release the prisoners as part of the deal to renew talks, it made no agreement to halt settlement construction during negotiations.