Former US Ambassador to the United Nations, John Bolton, said the two-state solution "has died after all efforts have failed for nearly 70 years to find a solution to the conflict in the Middle East".
Speaking on the 50th anniversary of Israel's occupation of Jerusalem, Bolton said there is no solution at present but for Gaza to return to Egyptian sovereignty and the West Bank to Jordanian sovereignty as it was before 1967.
Read: Remembering the Naksa
This would ensure an economic future for the region in the absence of a two-state solution, he explained.
"The Palestinian people have been exploited by extremist groups for a long time and their problems must be solved in a way that is better than the two-state solution," Bolton claimed.
The Palestinian President Abu Mazen [Mahmoud Abbas] has no legitimacy.
"We have reached the end of the illusion that began in 1964 with the establishment of the PLO, which created a feeling that it is the Palestinian alternative, and the issue here is not in the borders but in the nature of the state that will be alongside Israel which will be a state of terror, so it should not be".
The US diplomat said there was no reason to prevent the transfer of the US embassy to Jerusalem. "If the establishment of a Palestinian state is not on the agenda, there is no reason to delay the transfer of the embassy," he said.