BETHLEHEM (Ma'an) -- US Secretary of State John Kerry said Friday that Palestinians must be assured that the Israeli "occupation" would end as a result of a peace deal.
"Palestinians need to know that at the end of the day their territory will be free of Israeli troops -- that occupation ends," Kerry said at the global economic forum in Davos, Switzerland.
An Israeli-Palestinian peace agreement must include a "full-phased, final withdrawal of the Israeli army," he said, adding that Israel would need to be assured of its security.
At the same time, Kerry called for mutual recognition of "the Jewish state of Israel and the Arab state of Palestine."
He also said the failure current peace talks would threaten Israel's Jewish demographic character.
If talks fail, "the demographic dynamic will make it impossible to preserve its future as a democratic Jewish state," Kerry said.
Israel's security cannot be assured unless it secures its democratic future, he added.
The failure of the peace talks, Kerry said, would be dangerous for Palestinians.
"Failure will only embolden extremists and empower hardliners at the expense of the moderates, who have been committed to a nonviolent track to try to find peace."
He added: "Palestinians will be no closer to the sovereignty that they seek, no closer to their ability to be the masters of their own fate, no closer to their ability to grow their own economy, no closer to solving the refugee problem that has been allowed to fester for decades."
Kerry then discussed the benefits of a peace agreement for both Israelis and Palestinians.
Israel would gain recognition from several Arab and Islamic states, and therefore would have new opportunities for economic partnership, he said.
He said Palestinians would also be able to take new economic initiatives once they had achieved "a new life, free from occupation."
Peace talks between Israelis and Palestinians were relaunched in July under the auspices of the US after nearly three years of impasse.
Israel's government has announced the construction of thousands of housing units in illegal settlements since peace talks began.
Palestinian officials have repeatedly said that recognizing the concept of Israel as a "Jewish state" is unnecessary and threatens the rights of nearly 1.3 million Palestinian citizens of Israel who remained in their homes during the displacement of the majority of the Palestinian population during the 1948 war.
The internationally recognized Palestinian territories of which the West Bank and East Jerusalem form a part have been occupied by the Israeli military since 1967.