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Secretary of State John Kerry speaks about Israeli-Palestinian policy. He said, "We cannot defend and protect Israel if we allow a viable two-state solution to be destroyed before our own eyes." (AP Photo/Andrew Harnik)

Secretary of State John Kerry took direct aim at Israel in a major speech on Wednesday, forcefully criticizing its Jewish settlement expansion and demanding “mutual respect” from the key U.S. ally.

Kerry slammed the Israeli government for displacing Palestinian families and depriving them of “basic freedom and dignity,” while expressing serious concern about current Israeli leaders’ opposition to a two-state solution.

The top diplomat responded to accusations that the U.S. snubbed its ally last Friday by declining to veto a United Nations Security Council resolution that demanded Israel halt its settlement program, claiming the Obama admnistration acted with its ally’s best interest at hand.

“The U.S. did in fact vote in accordance with our values just as previous administrations have done at the Security Council before us,” Kerry said. “We cannot defend and protect Israel if we allow a viable two-state solution to be destroyed before our own eyes. The vote in the U.N. was about preserving the two-state solution – that’s what we were standing up for.”

WATCH LIVE: John Kerry delivers remarks on Middle East peace at the United Nations

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