Just weeks before President Barack Obama's administration hands over power to Donald Trump in the United States, the US relationship with Israel has erupted in deep controversy.
Secretary of State John Kerry has delivered what is being called the sharpest attack ever by a senior US official on Israeli settlements in the Palestinian territories.
Speaking at the US State Department, Mr Kerry has insisted Israel can never have peace unless it can reach a two-state solution with the Palestinians.
"Despite our best efforts over the years, the two-state solution is now in serious jeopardy. The truth is that trends on the ground -- violence, terrorism, incitement, settlement expansion and the seemingly endless occupation -- they are combining to destroy hopes for peace on both sides and increasingly cementing an irreversible one-state reality that most people do not actually want. They can choose to live together in one state, or they can separate into two states, but here is a fundamental reality: If the choice is one state, Israel can either be Jewish or democratic. It cannot be both."
Condemning both Palestinian violence and unfettered Israeli settlements, Mr Kerry has urged the two sides to continue working towards peace.
"We cannot, in good conscience, do nothing and say nothing when we see the hope of peace slipping away. This is a time to stand up for what is right. We have long known what two states living side by side in peace and security looks like. We should not be afraid to say so."
Mr Kerry went on to accuse Israeli prime minister Binyamin Netanyahu of presiding over what he called the most right-wing coalition in Israeli history.
"The Israeli Prime Minister publicly supports a two-state solution. But his current coalition is the most right-wing in Israel 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 in Israel's history, are leading in the opposite direction. They're leading towards one state."
In a responding speech of his own, Mr Netanyahu has expressed his disappointment at Mr Kerry's speech.
"I must express my deep disappointment with the speech today of John Kerry, a speech that was almost as unbalanced as the anti-Israel resolution passed at the UN last week. In a speech ostensibly about peace between Israelis and Palestinians, Secretary Kerry paid lip service* to the unremitting campaign of terrorism that has been waged by the Palestinians against the Jewish state for nearly a century. What he did was to spend most of his speech blaming Israel for the lack of peace by passionately condemning a policy of enabling Jews to live in their historic homeland and in their eternal capital Jerusalem."
Mr Netanyahu has questioned how peace can be achieved when the Palestinians continue to reject the existence of a Jewish state.
"My vision is that Israelis and Palestinians both have a future of mutual recognition, of dignity, mutual respect, coexistence. But the Palestinian Authority tells them that they will never accept, and should never accept, the existence of a Jewish state. So I ask him, 'How can you make peace with someone who rejects your very existence?'"
Earlier this week, the United States abstained from a United Nations vote to end Israeli settlement in the Palestinian territories, allowing the policy to pass.
Israeli education minister Naftali Bennett says he fears the UN decision to impose restrictions on Israeli settlement may fuel further terrorist attacks.
"When I saw those ambassadors in the UN clap, I just thought of the backwind it's giving thousands of terrorists around the world that see that the one single democratic state (in the Middle East) is being thrown under the bus by all these ambassadors. I'm afraid that it might generate more terror attacks in Berlin, Brussels or Orlando."
US president-elect Donald Trump, who had called for a US veto to stop passage of the policy, says the United States is treating Israel with disdain.
In a series of tweets to his 18 million Twitter followers, Mr Trump wrote:
"We cannot continue to let Israel be treated with such total disdain and disrespect. They used to have a great friend in the US, but not any more. The beginning of the end was the horrible Iran deal, and now this! Stay strong, Israel, January 20 is fast approaching!"
Mr Trump's pro-Israeli stance has raised concern among the Palestinians.
Palestinian legislator Dr Hanan Ashrawi says a friendship between Donald Trump and Israel could have powerful repercussions.
"Where the extremism and racism and xenophobia and Islamophobia and even anti-Semitism, as well as misogyny, in one part of the world finds its counterpart in the occupation and oppression and racism and violence in Israel. If you have this combination, it's a very lethal combination."
