Indyk: Israel settlements harm 'Jewish' nature of state

US special envoy to the Middle East peace talks Martin Indyk on Thursday condemned Israeli settlement activity in the occupied West Bank, warning that it could "drive Israel into an irreversible binational reality".

"If [rampant settlement activity] continues, it could mortally wound the idea of Israel as a Jewish state - and that would be a tragedy of historic proportions," the chief US negotiator was quoted by Israeli newspaper Haaretz as saying, during a conference at the Washington Institute for Near East Policy.

Indyk, who is also a former US ambassador to Israel, blamed both the Israelis and Palestinians for failure of the talks, saying that Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas "don't feel the pressing need to make gut-wrenching compromises".

Earlier this week, Indyk was said to have been quoted anonymously in an interview with the Israeli daily Yedioth Ahronoth, in which US officials blamed Israel for the breakdown in the talks and said Netanyahu "did not move more than an inch".

However, State Department deputy spokeswoman Marie Harf Monday dismissed the report, saying "both sides did things that were incredibly unhelpful."

On Thursday, Indyk confirmed that the US views both sides as uncooperative.

"The fact is both the Israelis and Palestinians missed opportunities, and took steps that undermined the process," Indyk said.

Indyk's reassurances comes after US Secretary of State John Kerry ignited controversy late last month when he was quoted as saying Israel is running the risk of becoming "an apartheid state".

Kerry's comments led some of Israel's right-wing supporters in the US to call for Kerry's removal 

“It is no longer enough for the White House to clean up after the messes John Kerry has made,” the neoconservative, self-styled Emergency Committee for Israel (ECI) said in a statement. “It is time for John Kerry to step down as Secretary of State, or for President Obama to fire him.”

On Thursday, Indyk said, "We have spoken publicly about unhelpful Israeli steps that combined to undermine the negotiations. But it is important to be clear: We view steps the Palestinians took during the negotiations as unhelpful too."

Indyk, however, did acknowledge the important place Israel holds for decision-makers in Washington.

"Only those who know it from the inside - as I have had the privilege to do - can testify to how deep and strong are the ties that now bind our two nations," he boasted.