"Given the actions and words of Palestinian leaders, we have doubts in Israel that they are committed to peace. Instead of preparing their people for peace, Palestinian leaders are inciting their people against Israel," Netanyahu said at a joint press conference with Kerry in Jerusalem Thursday.
Kerry arrived in Israel Thursday, his 10th visit in less than a year, for talks on a proposed framework on major issues confronting a peace deal, the State Department said.
Kerry told the press conference both sides would have to make "tough choices" in the weeks ahead, adding he planned to meet with Netanyahu and Palestinian President Mahmoud Abbas "to narrow differences on a framework that will set guidelines for negotiations. My role is not to impose U.S. ideas but to facilitate the ideas of both parties."
Kerry's latest trip comes amid growing resistance to his efforts to revive Middle East peace discussions that resumed five months ago after a three-year freeze.
Positions on both sides of the Israeli-Palestinian peace issue seemed to have hardened recently over proposals regarding Jewish settlements and security arrangements in Palestinian parts of the Jordan Valley under Israeli security force control, Voice of America said.
The two sides remain stuck over many issues, notably the borders of a future Palestinian state, the status of East Jerusalem and the right of Palestinian refugees to return. Leaders from both sides sounded pessimistic notes during the week, the Israeli news website Haaretz noted.
Palestinian President Mahmoud Abbas said at a rally before Kerry began his latest shuttle diplomacy trip that Palestinians need security, especially from attacks by Israeli settlers in the West Bank.
"We have made clear our rejection of any Israeli military presence in the territory of the future independent Palestinian state and our commitment to Palestinian sovereignty over all its land, water, resources, airspace, borders and crossings," he said.
Abbas added Palestinians would like an international presence to ensure security in its territory after any peace treaty is signed, a proposal Israel has rejected.
Also expected to come up during discussions are the Syrian civil war and Iran's nuclear program.
The Obama administration considers settlements in the West Bank and East Jerusalem -- territories Israel seized from Jordan in the 1967 Arab-Israeli War -- illegitimate and an obstacle to peace.
During the war, Israel took effective control of the Gaza Strip and the Sinai Peninsula from Egypt -- known then as the United Arab Republic -- the West Bank and East Jerusalem from Jordan and the Golan Heights from Syria.
Most of the world considers Israeli housing settlements in any of those captured territories illegal under international law.
Chief Palestinian negotiator Saeb Erekat says the expanded settlement plans undermine any chance of peace, and Palestinian leaders say they plan to fight them in the International Criminal Court in The Hague, Netherlands, if the peace talks fail.
Kerry was to meet with Abbas, Israeli Prime Minister Binyamin Netanyahu and other officials from Thursday through at least Sunday, and probably longer, to advance a U.S.-led effort to draft a preliminary framework for peace.
Kerry first proposed the framework last month as the end goal of nine months of Israeli-Palestinian peace talks that started in July.
Netanyahu said last week he planned to publish new housing construction proposals, or tenders, shortly after Monday night's Israeli release of 26 long-serving Palestinian prisoners -- the third of four promised releases.
Israel agreed to release 104 Palestinian prisoners in four phases as part of a U.S.-brokered deal to resume the peace talks.
Netanyahu has made a point of tying settlement announcements to the prisoners' release.