John Kerry has warned that Israel risks becoming an "apartheid state" if it fails to conclude a historic peace deal with the Palestinians, in a graphic indication of his frustration at the collapse of his peace initiative.
His blunt comment, made behind closed doors at a meeting of senior international officials, broke a long-standing American taboo on comparing Israel's treatment of the Palestinians to apartheid-era South Africa, and is certain to damage his already frayed relations with the Israeli political establishment.
Underscoring the urgency of creating an independent Palestine alongside Israel he declared: "A two-state solution will be clearly underscored as the only real alternative — because a unitary state winds up either being an apartheid state with second class citizens, or it ends up being a state that destroys the capacity of Israel to be a Jewish state."
Mr Kerry's remarks, to a meeting on Friday of the trilateral commission, an influential non-governmental organisation, were revealed on Monday.
It is believed to be the first time a serving American official has used the word apartheid in relation to Israel's policies in the West Bank, where more than 400,000 Jewish Israeli settlers live alongside 2.5 million Palestinians.
His comments — to an audience of US, Western European, Japanese and Russian officials — were made a day after Israel formally suspended peace talks in protest at a unity pact between Fatah and Hamas, the two main Palestinian factions.
Their disclosure coincided with Holocaust remembrance day in Israel, when the country's leaders mark the deaths of six million Jews at the hands of the Nazis in the Second World War.
Officials close to Benjamin Netanyahu, Israel's prime minister, declined to respond, but there was an angry reaction from the Yesha Council, which represents Jewish settlers living in the West Bank.
"His equation of the democratic State of Israel and Apartheid South Africa is a new low in American diplomacy and an insult to the people of Israel and South Africa," said Mr Dayan. "Had Secretary Kerry come to Judea and Samaria [the West Bank], he would have learned about the potential for coexistence without the need for incendiary comments. The time has come for the American administration to quietly exit this failed process."
There was also an angry backlash from American Jewish groups, with Abraham Foxman, director of the Anti-Defamation League, calling Mr Kerry's choice of term "startling and deeply disappointing".
David Harris, executive director of the American Jewish Committee, which supported Mr Kerry's peace efforts, said his comments were "not helpful".
However, Hanan Ashrawi, a member of the Palestine Liberation Organisation's executive council, said Mr Kerry had erred only in suggesting that an apartheid system lay in the future.
"He is using the word in the future tense but [the Israelis] have already created an apartheid system in the West Bank," she said. "They don't like it when people use accurate terms to describe what they are doing. When you build roads for settlers that no-one else can use, or have two separate legal systems, what else can you call it?"
President Barack Obama, who has vocally supported Mr Kerry's shuttle diplomacy, has shied away from using "apartheid" in an Israeli context. "It's emotionally loaded, historically inaccurate, and it's not what I believe," he said during the 2008 US presidential election campaign.
Mr Kerry said he was considering presenting Israel and the Palestinians with his own peace plan on a "take-it-or-leave-it" basis and suggested that negotiations might have a better chance of success if there was a change of leadership on either side.