The announcement came after he spent four days consulting the Israeli and Palestinian leadership -- and a last-minute helicopter dash to Ramallah in the West Bank.
"I'm pleased to announce that we've reached an agreement that establishes a basis for resuming final status negotiations between the Palestinians and the Israelis," Kerry told reporters in Amman, Jordan.
"This is a significant and welcome step forward. The agreement is still in the process of being finalised so we are absolutely not going to talk about any of the elements now."
Kerry said Palestinian negotiator Saeb Erakat and his Israeli counterpart Tzipi Livni would meet him in Washington "to begin initial talks within the next week or so".
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The announcement came at the end of four days of intense diplomacy by the secretary of state as he consulted Israeli and Palestinian leaders from his base in the Jordanian capital.
Kerry's last-minute whirlwind diplomacy came after the Palestinian leadership in Ramallah rejected his proposals for a framework to guide the relaunch of peace talks with the Israelis, stalled for nearly three years.
Talks have stuttered and started for decades in the elusive bid to reach a final peace deal between the Arab world and Israel.
But they collapsed completely in September 2010 when Israel refused to keep up a freeze on settlement building in Palestinian territories.
Kerry was upbeat in speaking to reporters before he left Amman today for Washington.
In his brief comments, he praised the courage of Abbas and Israeli Prime Minister Benjamin Netanyahu.
"No one believes the long-standing differences between the parties will be resolved overnight or just wiped away. We know that the challenges require some very tough choices in the days ahead," he said.
Kerry arrived on Tuesday in the Jordanian capital, where he held two rounds of talks with Abbas. He also won endorsement from the Arab League for his proposals to resume talks.