The top US diplomat touched down at Ben Gurion airport near Tel Aviv for a four-day visit to the region.
During his visit, he will separately hold talks with Prime Minister Benjamin Netanyahu and Palestinian Authority president Mahmoud Abbas to discuss his ideas for the "framework" towards a final peace agreement by April when a nine-month negotiating period agreed in July would end.
The guidelines would also contain formulae for other core issues such as Palestinian refugees and Jerusalem, which is claimed by both sides as their capital.
The Palestinians want borders based on the pre-1967 lines when Israel captured the West Bank and east Jerusalem during the Six-Day war.
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Abbas has said: "We are negotiating to reach a solution that would immediately lead to the establishment of a Palestinian state, with Jerusalem as its capital, on all the lands that were occupied in 1967."
Netanyahu is also facing fierce opposition from his Likud party members and coalition partners, with deputy Foreign Minister Zeev Elkin saying the government should reject any bridging proposals that entail Israeli recognition of the pre-1967 ceasefire lines as the basis for a final deal.
With both sides refusing to make any compromise on mostly irreconcilable demands, Kerry, who is here on his tenth visit since taking office in March, faces an uphill task to achieve consensus and have the framework in place soon.
"The Jordan Valley must be under Israeli sovereignty forever," Elkin said, referring to the border area with Jordan.
The Palestinians, however, rejected the demand and sought instead an international force there to guarantee security.
On the issues of refugees and Jerusalem, leaders from both sides have sounded far apart and questioned each other's commitment to ending the decades-old conflict.