Washington has criticized Shas spiritual leader Rabbi Ovadia Yosef over remarks that Palestinians should perish from this world.
"We regret and condemn the inflammatory statements by Rabbi Ovadia Yosef," US State Department spokesman Philip J. Crowley said on Sunday.
"These remarks are not only deeply offensive, but incitement such as this hurts the cause of peace," he added.
"As we move forward to re-launch peace negotiations, it is important that actions by people on all sides help to advance our effort, not hinder it," Crowley said.
The 89-year-old Rabbi Ovadia Yosef denounced Palestinians as bitter enemies of Israel and called for all Palestinians to "perish from this world."
The spiritual leader of Israel's leading ultra-Orthodox party also described Palestinians as "evil, bitter enemies of Israel" during his speech.
The remarks came ahead of upcoming direct peace talks between Israel and the Palestinian Authority in Washington in early September. The negotiations are intent upon a deal within a year to create an independent Palestinian state.
Israeli Prime Minister Benjamin Netanyahu and Palestinian leader Mahmoud Abbas will meet face-to-face on September 2 with US Secretary of State Hillary Clinton in the first direct talks in 20 months.