Bernie Sanders, the US senator and Democrat presidential candidate, on Monday said Israel's next government must negotiate a two-state solution with the Palestinians or face potential cuts to military aid.
Accusing Prime Minister Benjamin Netanyahu of racist policies, Mr Sanders spoke at a major event in Washington where he and other Democratic Party contenders signalled that a major policy shift was needed, given that the peace process is in tatters.
Mr Sanders' remarks to J Street, a liberal pro-Israel group that says it is more in tune with American Jews than US President Trump's administration, came as the UN special envoy for Middle East Peace called the situation “a multi-generational tragedy”.
If a Democrat were elected president in November 2020 it would probably mean a return to the longstanding US position of a Palestinian state alongside Israel, a hope that has all but died with the alliance between Mr Trump and Mr Netanyahu.
Mr Sanders, a Jewish man who rarely speaks of his faith, said the murder of much of his father's family in the Holocaust had shaped his leftist political views.
“If there are any people on earth who understand the danger of racism and white nationalism, it is certainly the Jewish people,” he said to applause among thousands at the Walter E Washington Convention Centre.
“Let me underline this because it will be misunderstood: it is not anti-Semitism to say that the Netanyahu government has been racist. It is a fact.”
Mr Sanders said that if Israel wanted US military funding it would have to fundamentally change its relationship with the Palestinians.
“We demand that the Israeli government sit down with the Palestinian people and negotiate an agreement that works for all parties,” he said.
Mr Netanyahu's political future is in jeopardy after twice failing to form a government following elections this year.
He called the polls after massive concessions from Mr Trump, including the move to Jerusalem of the US embassy and acknowledgement of Israeli sovereignty over the Golan Heights.
The Israeli leader is also facing potential corruption charges. His main rival, Benny Gantz, has been given the task of trying to form a new administration.
Mr Sanders called for some of the $3.8 billion (Dh13.96bn) in annual US military assistance to Israel to be turned into humanitarian aid for the Gaza Strip.
It would be a “radical intercession” for the packed, impoverished territory that has been under a blockade since it elected Hamas to rule in 2007.
"Who is going to deny that when youth unemployment is 60 per cent, when people have no hope, when people cannot literally leave the region – who can think for a moment that you're not laying the groundwork for continued violence?" Mr Sanders asked.
Joe Biden and Elizabeth Warren, the Democratic presidential frontrunners, both appeared before J Street delegates in video messages, and said they would oppose any action that closed the door on a Palestinian state.
“If Israel's government continues with steps to formally annex the West Bank, the US should make clear that none of our aid should be used to support annexation,” Ms Warren said.
She said she would restore US aid to the UN agency for Palestinian refugees, and reopen the Palestinian leadership's offices in Washington, which the Trump administration closed.
Mr Biden, who as Barack Obama's vice president had uneasy relations with Mr Netanyahu, said: “We can't be afraid to tell the truth to our closest friends.
"The two-state solution is the best, if not the only, way to secure a peaceful future for a Jewish, democratic state of Israel.”
The Trump administration's own plan for Middle East peace is stumbling after repeated delays.
Its economic package was released in a conference hosted in Bahrain this year, which was widely dismissed as a failure.
The political elements of the plan have been repeatedly delayed, with the setbacks coinciding with Mr Netanyahu's domestic troubles and unravelling leadership.
Other Democratic presidential hopefuls, Pete Buttigieg, Senator Amy Klobuchar and Julian Castro, spoke at the Washington event and said they would take steps to reverse the Trump administration's policy decisions.