Kerry, in his 10th trip to the region since March 2013, is trying to establish a framework for further negotiations that might lead to a final peace agreement, the British newspaper Guardian reported Saturday.
"We know what the issues are and the parameters," Kerry said Thursday on arrival in Jerusalem. "The time is soon arriving when leaders will have to take tough decisions."
The weekend series of meetings is intended to "narrow differences on a framework that will set guidelines for negotiations," he added.
Neither Israeli Prime Minister Binyamin Netanyahu nor Palestinian President Mahmoud Abbas will be asked to sign the framework agreement, but it could lead to an extension of the April deadline for a deal.
Right-wing Israeli MPs from Netanyahu's Likud party, and members of coalition partner Jewish Home, have called for the prime minister to reject the framework agreement.
The executive committee of the Palestinian Liberation Organization has demanded Abbas end talks and resume a strategy of gaining Palestinian membership to international bodies such as the International Criminal Court.
Following a meeting with Kerry, Israeli Foreign Minister Avigdor Lieberman issued a statement calling for any agreement to be based on strong security for Israel and a stable economy for Palestinians, Voice of America reported.
Netanyahu expressed doubts Thursday the Palestinians truly wanted peace, accusing them of inciting violence among its citizens. Palestinian leaders have accused Israel of sabotaging peace efforts by further expansion of settlements in the West Bank and East Jerusalem.