"What's important is that negotiations restart," Fabius told reporters during a visit to Cairo, where he held what he said were intensive talks with Egyptian officials on the Israeli-Palestinian peace process.
"We need Israel's security to be totally assured, that is essential, but at the same time we need the rights of the Palestinians to be recognised because without justice there can be no peace," Fabius said.
"From this point of view, when settlement building continues, (the prospect of) a two-state solution recedes."
Israel says the process failed because the Palestinians refused to accept a US framework document outlining the way forward.
But the Palestinians blame the collapse on Israel's settlement building and the government's refusal to release veteran prisoners.
The relationship between the two sides remains severely strained, prompting the Palestinians to step up efforts on the international stage to seek their promised state.
Fabius met with Egyptian President Abdel Fattah al-Sisi and Foreign Minister Sameh Shoukry as part of a regional visit aimed at kick-starting the stalled talks.
The UN has repeatedly called on Israel to halt the construction of Jewish settlements on Palestinian land, which it has branded as illegal and a move to erase the prospect of a Palestinian state.
Fabius will head to Amman Sunday for discussions with Jordan's King Abdullah II before flying to Ramallah to meet Palestinian president Mahmud Abbas.
The final leg of his two-day trip will see him hold talks with Israeli Prime Minister Benjamin Netanyahu in Jerusalem.
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