Heading into a meeting with Netanyahu in Jerusalem, Kerry acknowledged that the peace process always experiences difficulties and tensions but expressed confidence in the ability to work them through. We are in critical talks with respect to the possibilities of a long, long sought goal.... Israel deserves security.... The Palestinians deserve a state ... that is what we are working towards," Kerry said. Netanyahu said Israel has "abided scrupulously" by the agreements reached prior to the relaunching of the talks but expressed concern for their progress, accusing the Palestinians of creating "artificial crises" and avoiding "historic decisions needed to make genuine peace." Israel last week announced plans to build settlements in the West Bank and Jerusalem amid criticism that the projects would hurt the peace process. The announcement came hours after Israel released a group of Palestinian prisoners. The announcement angered Palestinians, who cautioned the move could kill the talks and protested to the U.S. Kerry acknowledged the issue after meeting with Abbas in Bethlehem. "We consider now and have always considered the settlements to be illegitimate," he said. Nodding to Israel's claims that both the U.S. and Palestinians were aware construction would take place during the talks, Kerry stressed it would be better to limit it as much as possible to "create a climate for these talks ... to proceed effectively." Kerry stated "unequivocally that President Abbas is 100% committed to these talks." He stressed that Abbas promised Palestinians would not approach the United Nations for the duration of the talks in exchange for the prisoners released by Israel. At no point did the Palestinians agree to "somehow condone or accept the settlements," Kerry said. Dozens of Palestinians demonstrated during Kerry's visit, urging Abbas to break off the talks with Israel and carrying signs declaring "no negotiations with settlements." Kerry also pledged an additional $75 million for a high-impact infrastructure investment to improve the day-to-day life of Palestinians, on top of the $25 million previously committed. In addition to the peace talks, Netanyahu and Kerry addressed the second matter on their agenda: Iran's nuclear program. The goal is to ensure Iran has "only a peaceful nuclear program," Kerry said, reiterating his position that "no deal is better than a bad deal." Netanyahu called for a "complete dismantling of Iran's nuclear weapons capability." The next round of talks between the West and Iran is set to take place in Geneva on Thursday. Sobelman is a news assistant in The Times' Jerusalem bureau. Special correspondent Maher Abukhater in Ramallah, West Bank, contributed to this report.