"The agreement is still in the process of being formalized," he said, refusing to give any details on what had been agreed so far. "If everything goes as expected," Israeli and Palestinian negotiators will hold initial talks "within the next week or so," he said.
Palestinian President Mahmoud Abbas, who met with Kerry in the West Bank town of Ramallah earlier Friday, said "lengthy talks ... have resulted in the Palestinians accepting the resumption of talks."
In a statement, Abbas said "some details still need to be worked out," but that Israeli and Palestinian officials could be invited to Washington for talks in the coming days.
The issue of basis of the negotiations has been a major impediment to resuming the talks. On Thursday evening, the Palestinian leadership balked at dropping a main condition: They demand a guarantee that negotiations on borders between a Palestinian state and Israel would be based on the cease-fire line that held from 1949 until the 1967 war, when Israel captured the West Bank, Gaza Strip and east Jerusalem.
Israel rejects preconditions on the talks.
The announcement suggested that the question had been resolved. But Kerry said no details of the agreement would be revealed yet. "The best way to give these negotiations a chance is to keep them private," he said. "We know that the challenge require some very tough choices."
A senior State Department official said the two sides had agreed on the core elements that will allow direct talks to move forward, and that agreement was not reached until Friday afternoon. Still to be worked out in the upcoming initial talks are the agenda of the final status negotiations and the process.
When they first meet, they will not be "sitting down to draw a line on the map," the official said, speaking on condition of anonymity because he was not authorized to discuss the details.
The office of Israeli Prime Minister Benjamin Netanyahu said it would not immediately comment on Kerry's announcement.
Kerry has made winning a resumption of Mideast peace talks one of his priority, and this was his sixth visit to the region as secretary of state. He has been in the region since Monday, meeting in person with Abbas three times over the course of the week. By contrast, he did not see Netanyahu in person at all, but spoke to him numerous times by phone.
On Friday, following the Palestinian leadership's statement of the night before, Kerry held more than 90 minutes of talks with chief Palestinian negotiator Saeb Erekat in Amman, then spoke by phone with Netanyahu. He then flew by helicopter to Ramallah for an hour-long meeting with Abbas before returning to Amman where he made the announcement.
Hoping to push Israelis and Palestinians toward talks, President Barack Obama asked Netanyahu to work with Kerry "to resume negotiations with Palestinians as soon as possible," according to a statement released by the White House late Thursday.
Previous Israeli governments twice negotiated on the basis of the 1967 lines, but no peace accord was reached. Besides disagreeing over how much land to trade and where, the two sides hit logjams on other key issues, including dividing Jerusalem and the fate of Palestinian refugees. Israel withdrew from Gaza in 2005.
Netanyahu has given lukewarm endorsement to the idea of a Palestinian state but has not delineated his vision of boundaries, while demanding that the Palestinian recognize Israel as the Jewish state. Palestinians reject that, concerned that it would undermine their claims that millions of refugees and their descendants have the right to return to their original homes, lost in the 1948-49 war surrounding Israel's creation. Israel has rejected that claim outright.
After their late-night meeting, the Palestinians did not bring up their often-repeated demand that Israel stop building in Jewish settlements in the West Bank and east Jerusalem before talks could resume. One official said that if Israel accepts the 1967 lines as a basis, that would make most of the settlements illegitimate.
While Kerry has not publicized details of his plan, an Arab League decision Wednesday to endorse his proposal raised speculation that the Palestinians would agree. Abbas traditionally has sought the blessing of his Arab brethren before making any major diplomatic initiative.
Ahmed Majdalani, a Palestinian leader, said Kerry has proposed holding talks for six to nine months focusing on the key issues of borders and security arrangements.
He said Kerry would endorse the 1967 lines as the starting point of negotiations and assured the Palestinians that Israel would free some 350 prisoners gradually in the coming months. The prisoners would include some 100 men that Israel convicted of crimes committed before interim peace accords were signed in 1993. Israel has balked at freeing these prisoners in the past because many were convicted in deadly attacks.
Although the plan does not include a settlement freeze, it was not clear whether Israel would accept any reference to the 1967 lines.
Israeli Cabinet minister Yair Lapid said it was "too early to say" whether Kerry had found a formula for talks.
"Secretary Kerry has done a tremendous job in trying to put both sides together," he told The Associated Press. "Of course Israel is more than willing and has expressed its agreement to go back to the negotiation table, but apparently it's going to take a little more time."
While Israel has balked at Palestinian demands, the international community has largely rallied behind the Palestinian position on borders and Jewish settlements.