The comments by Public Security Minister Gilad Erdan were the latest salvo in a toxic exchange following the U.S.'s refusal to veto a UN Security Council resolution last week that called Israeli settlements in the West Bank and east Jerusalem a violation of international law.
Israeli Prime Minister Benjamin Netanyahu has slammed the resolution, and accused the US of colluding with the Palestinians in drawing it up.
Next month, France is set to host an international conference where 70 countries, over Israeli objections, hope to endorse an international framework for Mideast peace.
Israeli officials fear that the conference's recommendations may then be approved in another UN Security Council resolution just before Obama leaves office on January 20.
In a radio interview, Erdan said Kerry's speech was part of a broader effort to hinder the incoming administration of Donald Trump, who has signaled he will have much warmer relations with Israel.
Erdan, a member of Netanyahu's Likud Party and inner Security Cabinet, said Obama administration officials are "pro-Palestinian" and "don't understand what's happening in the Middle East."
Kerry mediated a nine-month round of peace talks that broke down in early 2014 with little progress.
Israeli leaders have made no secret that they are counting on Trump to change US policy.
While Trump has not outlined a vision, he has signaled a much more sympathetic approach toward Israel, appointing an ambassador with strong ties to the West Bank settler movement and promising to move the US Embassy from Tel Aviv to Jerusalem, over Palestinian objections.
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