Facing stalled peace talks between Israelis and Palestinians, Secretary of State John Kerry today urged Israel to halt new settlement construction, calling it "illegitimate" after construction plans in East Jerusalem threatened to derail negotiations.

Kerry is in Israel, as part of an eight-day, eight-country trip to the Middle East and Europe, attempting to salvage the peace talks that hit turbulence last week.

Kerry met today with Israeli Prime Minister Benjamin Netanyahu, President Shimon Peres, and Palestinian President Mahmoud Abbas, seeking to assuage Israelis on Iran and reassure Palestinians that the U.S. opposes the Israeli settlement construction plans that have threatened to derail negotiations.

"[W]e consider now and have always considered the settlements to be illegitimate," Kerry said after a meeting with Abbas in Bethlehem. "The Palestinians believe that the settlements are illegal. The United States has said that they believe the settlements are not helpful and are illegitimate."

Last week, Palestinian negotiators reportedly offered their resignations in protest of Israel's plans for 1,500 new settlement homes in East Jerusalem, announced along with the release of 26 Palestinian prisoners held in Israel. Palestinian officials later denied that negotiators had quit.

In July, Kerry set a nine-month timeline for reaching a deal that would create a Palestinian state.

While in Israel, Kerry also announced $75 million in U.S. aid for a Palestinian infrastructure program, which Kerry said will mean more health clinics and schools, through the U.S. Agency for International Development (USAID).