"There are ideological differences at the heart of the government," Livni told public radio.
The stalling of the peace process since September 2010 "only serves the interests of those who think that each passing day (without a peace agreement) allows them to build a new house," she said, in reference to Jewish settlement building on Palestinian territory, a key issue preventing a return to talks.
"But this is not the position of the majority of Israel's population," she added.
Livni's remarks came hours ahead of a meeting with Kerry, who arrived in Israel on Thursday to push for a resumption of talks on his fourth visit to the region since taking office in February.
Kerry headed straight into a meeting with Israeli Prime Minister Benjamin Netanyahu. He is also due to meet President Shimon Peres and travel to Ramallah to meet Palestinian president Mahmud Abbas.
Israel's coalition government, headed by the Likud party's Netanyahu, also includes the rightwing nationalist Jewish Home and the centrist Yesh Atid, which oppose concessions on settlement building, the cessation of which is a Palestinian precondition for any peace talks.
Palestinian peace negotiator Saeb Erakat said earlier this month that Israeli plans to build nearly 300 new homes in a West Bank settlement near Ramallah were proof it was trying to "sabotage" US efforts to revive talks.
"We condemn this new decision which is proof that the Israeli government wants to sabotage and ruin the US administration's efforts to revive the peace process," he told AFP.
His remarks came shortly after officials confirmed the defence ministry had given the go-ahead to build 296 housing units at Beit El, although Israel's chief negotiator sought to play down the impact of the decision.
"There is no need for this to become a pretext for drama or anger," Livni told army radio at the time, saying she had updated the Americans about the development.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ