"If the choice is one state, Israel can either be Jewish or it can be democratic, but it cannot be both," Kerry stated.
Kerry explained that the trends on the ground, including settlement expansion in the West Bank and terrorism, are reinforcing a polarized status quo.
The United States urges Israel and Palestine to take constructive steps on the ground to advance a two-state solution, according to Kerry.
"We've called for both sides to take significant steps on the ground to reverse current trends and send a different message, a clear message, that they are prepared to fundamentally change the equation without waiting for the other side to act," Kerry said.
Kerry delivered his remarks at the State Department on Wednesday following a controversial US decision to abstain from a vote on a UN Security Council resolution condemning Israel’s settlement activities in the West Bank and East Jerusalem.
The US abstention allowed the resolution to pass with unanimous support of the other 14 permanent and rotating UN Security Council member states.