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.”

Kerry’s remarks, to a meeting on Friday of the trilateral commission, an influential non-governmental organization, were revealed on Monday in a transcript obtained by the Daily Beast website.

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 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.

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.

President Barack Obama, who has vocally supported 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.

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.

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