The talks are scheduled to resume in Washington on Monday evening and on Tuesday and will be conducted by senior aides to Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas, the State Department said.
Middle East analysts voiced skepticism that the talks might lead to a peace treaty to end the more than six-decade conflict that has defied two decades of U.S. efforts to broker a solution.
Still, the resumption of negotiations is a rare moment of good news in the Middle East for the Obama administration, which has struggled to formulate a policy to try to end the civil war in Syria or to facilitate a democratic transition in Egypt.
Even getting the Israelis and the Palestinians to agree to resume talks required great effort by Kerry, who made six peace-making trips to the region in the last four months - an unusual amount of time - to coax them back.
The scene got cleared when the Israeli Cabinet on Sunday approved the release of 104 Palestinian prisoners, with 13 ministers voting for the release, seven against and two abstaining, an Israeli official said.
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