"The minute the Israeli government agrees to cease all settlement activities... And agrees to implement the signed agreements on the basis of mutual reciprocity, the Palestinian leadership stands ready to resume permanent status negotiations on the basis of international law and relevant international legality resolutions... Under a specified timeframe," he said in a statement.
Kerry's speech included sharp criticism of Israeli settlement building and came after last week's UN Security Council resolution calling for an end to such activity.
Washington and others say continued settlement building is steadily eroding the possibility of a two-state solution to the Israeli-Palestinian conflict.
Israeli Prime Minister Benjamin Netanyahu condemned Kerry's speech as biased against Israel, and accused the outgoing secretary of state of paying only "lip service" to Palestinian violence.
Disclaimer: No Business Standard Journalist was involved in creation of this content