TEL AVIV, Israel — Secretary of State John Kerry urged Israel's government on Friday to prevent further settlement construction where possible to help revitalize Middle East peace hopes, but stressed that the Jewish state and Palestinians alike should remain focused on the larger goal of restarting direct negotiations.

Explaining part of the strategy of his now 2-month-old peace initiative, Kerry said Israeli Prime Minister Benjamin Netanyahu's government can stop only some of the settlements being built in lands contested by the Israelis and Palestinians — and in those cases it should act.

Unlike in previous American-led mediation efforts, however, he stopped short of demanding a full settlement freeze and said the contentious issue could better be handled through a quick restart of direct Israeli-Palestinian negotiations.

The Palestinians have long demanded an end to such construction before returning to talks, which have hardly occurred at all in the last 4½ years.

The United States has supported Netanyahu's demand for negotiations to restart without preconditions — an endorsement renewed by Kerry after two days of talks in Jerusalem and Ramallah with Israeli and Palestinians leaders.

Kerry said it was important not to let settlements stand in the way of talks that could finally set borders as part of a peace agreement. Then, he said, the issue would be resolved because each side would have clear boundaries for their two states.

Despite the continued difficulties in even getting the Israelis and Palestinians back to the negotiating table, Kerry insisted he believed peace is possible.

Earlier Friday, he met Netanyahu for the second time in as many days and then spoke with outgoing Palestinian Prime Minister Salam Fayyad.

On Thursday, Kerry praised Netanyahu for the "seriousness" with which he is looking at ways to revitalize peace hopes.

Kerry's trip, however, only seemed to prompt more pessimism from Palestinian officials about chances for peace.

They say they are planning to resume their campaign of seeking membership in key international organizations as early as next month in a bid to put pressure on Israel into offering some concessions.

Without major U.S. pressure on Israel, the outlook seems bleak. The most immediate divide concerns the issue of Israeli settlement building in the West Bank and east Jerusalem — lands that Israel conquered in the 1967 Mideast war and which the Palestinians hope to include in their state.

Last week, Kerry called Netanyahu to complain about a move to legalize four previously illegal settlements in the West Bank, according to U.S. officials. Publicly, however, he has taken a softer touch and Palestinians are dismayed.

Kerry brought "nothing new" to his discussions Thursday with Palestinian President Mahmoud Abbas, lamented one Palestinian official familiar with the talks.

The official, who spoke on condition of anonymity because he wasn't authorized to speak publicly on the private meetings, said Palestinian expectations remain low because they see Kerry "trying to accommodate the Israelis, not pressure the Israelis."

While Palestinians have praised Kerry's efforts, they say there has been little progress ahead of what they believe to be a June 7 deadline for action. They are already beginning work on a "day-after" strategy.

And they say there is no point in negotiating while Israel continues to build Jewish settlements. More than 500,000 Israelis now live in the West Bank and east Jerusalem, making it increasingly difficult to partition the land between Israel and the Palestinians. Israel also captured the Gaza Strip in 1967, though it withdrew from the territory in 2005.

When President Barack Obama took office in 2009, he took a tough line against the settlements and prodded Israel into a partial construction freeze.

But Israel refused to extend the freeze, and a short-lived round of negotiations in 2010 quickly collapsed. Obama similarly tried unsuccessfully to press Israel into accepting the 1967 lines as a baseline for talks.

Fed up with the impasse and disillusioned with Obama, the Palestinians last fall won recognition from the U.N. General Assembly as a nonmember state, an upgraded diplomatic status that gives them access to key U.N. bodies.

The United States was one of just eight countries that sided with Israel in opposing the bid.

Israel fears the Palestinians will now seek membership in international agencies to promote an anti-Israel agenda. Its biggest concern is that the Palestinians will try to join the International Criminal Court and try to press war crimes charges against Israel.