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Ammon News - TEL AVIV (Reuters) - Israeli and Palestinian leaders are nearing crunch time, when they must decide whether to revive long-dormant peace negotiations to end their decades-old conflict, U.S. Secretary of State John Kerry said on Friday.

Speaking to reporters after two days of meetings, Kerry said he had had "very productive" talks with the two sides and urged them to avoid taking any actions that would jeopardize his shuttle diplomacy.

"We are reaching the time (when) leaders need to make hard decisions," Kerry said at the end of his fourth visit to the region in barely two months as he tries to overcome deeply entrenched positions that have snarled the peace process.

Israeli and Palestinian officials have raised doubts in private about the prospects for a swift return to talks, which broke down in 2010 over the issue of Jewish settlement building in the occupied West Bank.

The Palestinians have repeatedly said they will only resume negotiations if Israel halts construction on land seized in the 1967 war. The Israeli government has said there should be no preconditions and sparked anger earlier this month when it moved to legalize four unauthorized West Bank settler outposts.

Kerry said he had raised the issue with Israeli Prime Minister Benjamin Netanyahu.

"I made clear in my discussions that the parties should be focused on making progress toward ... direct negotiations," he said, adding that each side needed to "refrain from provocative rhetoric or actions ... that take us backwards."