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Palestinians work at a construction site in the Israeli settlement of Efrat, in the West Bank. A U.S. decision not to veto a UN resolution last week condemning the settlements has sparked a diplomatic uproar.BAZ RATNER/Reuters

The Liberal government is reiterating its support for a two-state solution in the Middle East but did not go to the same extent as U.S. Secretary of State John Kerry in strongly denouncing Israeli settlement-building following a stinging rebuke from the UN.

The government's measured tone is being harshly criticized by the Conservatives, who accused the Liberals of pandering for a UN Security Council seat and expressed disappointment in the actions of the administration of outgoing U.S. President Barack Obama.

A day after Mr. Kerry tore into the Israeli government for settlement-building, a spokeswoman for Foreign Affairs Minister Stéphane Dion said Canada continues to support a two-state solution for Israel and a Palestinian state.

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"As a determined peace-builder, Canada supports efforts to uphold the two-state solution, and to build the conditions for the parties to return to direct negotiations to find a comprehensive, just and lasting peace," spokeswoman Chantal Gagnon said in an e-mail.

In a farewell speech on Wednesday, Mr. Kerry lashed out at the Israeli government and accused Prime Minister Benjamin Netanyahu of dragging his country away from democracy. "If the choice is one state, Israel can either be Jewish or democratic – it cannot be both – and it won't ever really be at peace," Mr. Kerry said. But he rejected the notion that the United States has abandoned Israel with the UN vote.

In a departure from past policy, the United States chose to abstain from – rather than to veto – a UN Security Council resolution last week that condemned Israeli settlements in the West Bank and east Jerusalem as a "flagrant violation" of international law. The resolution passed 14-0.

Mr. Netanyahu, in turn, accused the Obama administration of a biased bid to blame Israel for failure to reach a peace deal – and said he looks forward to working with president-elect Donald Trump, who has sided unequivocally with Israel.

"We cannot continue to let Israel be treated with such total disdain and disrespect," Mr. Trump tweeted this week. "Stay strong Israel, January 20th is fast approaching!"

Conservative MP Peter Kent, the party's foreign-affairs critic, issued a lengthy statement accusing the Liberal government of designing its foreign-policy choices to regain a UN Security Council seat.

Prime Minister Justin Trudeau has said Canada would like to win a non-permanent seat, which the Conservatives lost in 2010, for a two-year term that begins in 2021.

"Standing up for Canada's national interests, and the interests of our allies, has come second to the Liberal Party goal of appeasing the UN," Mr. Kent said. "The silence from the Liberal government on this anti-Israeli resolution is shameful, but it is not surprising."

He also expressed disappointment in Mr. Obama's administration for allowing the resolution to pass.

"We strongly reject the wording of this United Nations resolution which appears to suggest that the Western Wall and East Jerusalem should become part of a Palestinian state.

"We are also disappointed in the actions of the outgoing Obama administration, which abandoned historic United States precedent by refusing to veto this one-sided and prejudiced resolution," he said.

Neither Mr. Dion, nor Canada's ambassador to Israel, Deborah Lyons, were available for interviews on Thursday.

Paul Heinbecker, Canada's former representative to the UN and a former foreign-policy adviser to Brian Mulroney, said Mr. Kerry's speech reflected the United States pent-up frustrations toward Israel.

"It was a heartfelt, strongly worded, strongly felt expression of exasperation that the Israelis have not co-operated in seeking a two-state solution, and have done, some might say, as much as they could to prevent it from happening," Mr. Heinbecker said.

He said Canada's statement strikes the right balance: While unremarkable, is not objectionable, either.

"I don't think they need to do more than that. Certainly they should not walk away from what Kerry said. And certainly they should not try to guess what Trump is going to do," he said.

NDP MP Hélène Laverdière and Green Party Leader Elizabeth May both said they agreed with Mr. Kerry's comments.

"The [Israeli] settlements have a negative effect on the prospects for peace. And what we want in the region is peace for everybody," said Ms. Laverdière, the NDP foreign-affairs critic.

"I'd like to see Canada take a forceful position also. As John Kerry said, friends are there also to tell you when something is not appropriate or acceptable."

Ms. May said she wished the United States hadn't waited so long to stop being a veto on UN resolutions.

"Netanyahu's policies are a threat to peace. People should be able to say that out loud without having a ton of bricks come down on them," she said.

"A two-state solution is disappearing."

With a report from Associated Press