Israel’s approval of controversial new settlements scuppered an opportunity for progress in US-sponsored peace talks with the Palestinians, Secretary of State John Kerry said Tuesday.

Israel's approval of controversial new settlements scuppered an opportunity for progress in US-sponsored peace talks with the Palestinians, Secretary of State John Kerry said Tuesday.

The Israeli government announced a major expansion of settlement construction in the West Bank last month, just as Washington was scrambling for a way to get the two sides to extend peace talks beyond an April 29 deadline.

While Kerry blamed intransigence on both sides, he told US lawmakers that a delayed Israeli plan to release several Palestinian prisoners as part of a good faith effort was sabotaged by the settlements move.

"In the afternoon, when they were about to maybe get there, 700 settlement units were announced in Jerusalem and, poof, that was sort of the moment," he said.

"We find ourselves where we are," added Kerry, who has met repeatedly with both sides.

Israeli-Palestinian peace talks have teetered on the brink of collapse, with Washington fighting an uphill battle to get the two sides to agree to a framework proposal to extend the negotiations to the year's end.

A Palestinian spokesman last month blamed the impasse on Israel's West Bank settlement plans.

Kerry, testifying before the Senate Foreign Relations Committee, was drawn into a heated exchange with Senator John McCain, who declared the peace talks "finished."

While Kerry insisted that Israelis and Palestinians were keen on continuing the process, McCain cut in: "It is stopped," he told Kerry. "Recognize reality."

Kerry refused to see it that way.

"My hope is the parties will find a way back. We're working with them to try to do so," Kerry said.

He stressed there has been "a narrowing of differences" between the two sides, although he would not elaborate.

Meanwhile, the two sides met US envoy Martin Indyk late on Monday and are to meet him again on Wednesday, a Palestinian source told AFP.

Iran nuclear 'breakout' time at two months: Kerry
   
Iran is two months away from breakout capability to produce enough nuclear material for a bomb should they resume their mothballed enrichment process, Secretary of State John Kerry warned Tuesday.

"I think it is fair to say, I think it is public knowledge today, that we are operating with a time period for a so-called breakout of about two months," Kerry told US lawmakers.