US Secretary of State John Kerry urged Israeli and Palestinian leaders to take inspiration from Nelson Mandela in peace talks, as he wrapped up another visit to the region Friday.

Kerry said Israel and the Palestinians were closer to peace than they have been in years, even though the direct negotiations he brokered have made little visible headway since they began in late July.

"I believe we are closer than we have been in years to bringing about the peace and the prosperity and the security that all of the people of this region deserve," Kerry told reporters at Ben Gurion airport near Tel Aviv at the end of his 36-hour visit.

Remembering the life of Mandela, who died late on Thursday, Kerry said the former South African president should be of particular inspiration for those engaged in the talks.

"The example of Nelson Mandela is an example we all need to take to heart as we face the challenges of trying to reach a two-state solution," said Kerry.

"The naysayers are wrong to call peace in this region an impossible goal," he added, before quoting Mandela: "It always seems impossible until it's done."

Kerry made the remarks after meeting Israeli Prime Minister Benjamin Netanyahu for the third time in 24 hours, for discussions on potential security arrangements in the context of a peace deal.

He held six hours of talks across two meetings with Netanyahu on Thursday, and another three hours talking in Ramallah with Palestinian president Mahmud Abbas.

The US diplomat has said Israel's security is "fundamental" to the peace negotiations with the Palestinians, and a top priority for Washington in nuclear negotiations with Iran.

But his talks in Ramallah did not appear to go so well, with a senior official saying US proposals on security were unacceptable.

"Today, we discussed at great length issues of security in the region, security for the state of Israel, security for a future Palestine. And we, I think, made some progress," said Kerry on Thursday.

"The interests are very similar, but there are questions of sovereignty, questions of respect and dignity which are obviously significant to the Palestinians."

'Apartheid shall not prevail in Palestine'

Chief negotiator Saeb Erakat told AFP the situation was "still very difficult and matters are complicated" but another senior Palestinian official was more direct, saying Kerry's security proposals "were very bad ideas which we cannot accept".

In talks with Netanyahu on Thursday, Kerry and top security adviser General John Allen outlined their view of some of the security challenges likely to face Israel in the context of a final peace agreement.

Maariv newspaper said Israeli officials were pleased with Kerry's security proposals, but firm opposition from the Palestinians was what prompted him to schedule a third meeting with Netanyahu.

A diplomatic source quoted by the paper said Washington "had moved considerably in the direction of Israel's demands" and had "accepted Israel's position on a long-term presence in the Jordan Valley".

The outline "gives good answers to the Israeli demands and is very forthcoming towards Israel," the source said.

Haaretz newspaper has said Washington is focusing on resolving Israel's security needs in the hope it would allow them to push Netanyahu on other aspects, such as the borders of a future Palestinian state.

Netanyahu has said Israel would only accept the emergence of a Palestinian state if it was demilitarised, with Israeli troops deployed along the Jordan Valley -- an option the Palestinians completely reject.

He paid tribute to Mandela, saying he was "a man of vision and a freedom fighter who disavowed violence".

"He set a personal example for his country during the long years in which he was imprisoned. He was never haughty. He worked to heal rifts within South African society and succeeded in preventing outbreaks of racial hatred," said Netanyahu.

For his part, jailed Palestinian leader Marwan Barghuti said Mandela's struggle for freedom inspired Palestinians to believe their own liberation was possible.

"Apartheid did not prevail in South Africa, and apartheid shall not prevail in Palestine," he wrote in an open letter to Mandela sent from Cell 28 of Hadarim prison, where he is serving five life sentences for attacks on Israeli targets.