Israeli Prime Minister Benjamin Netanyahu was “completely upfront” about announcing new settlement construction during peace negotiations, U.S. Secretary of State John Kerry said.

Kerry told reporters in Brazil on Tuesday that Netanyahu told both him and Palestinian Authority President Mahmoud Abbas that he would be announcing “some additional building that would take place in places that will not affect the peace map, that will not have any impact on the capacity to have a peace agreement.”

“That means that it is building within the so-called blocs in areas that many people make a presumption – obviously not some Palestinians or others – will be part of Israel in the future. He has specifically agreed not to disturb what might be the potential for peace going forward,” Kerry said.

In answer to a reporter’s question, Kerry said that he had spoken on Tuesday with Netanyahu in what he called “a very frank and open, direct discussion about the question of settlements.” He added that “The policy of the United States of America with respect to all settlements is that they are illegitimate, and we oppose settlements taking place at any time, not just the time of the peace process.”

Kerry had been scheduled to speak by phone on Tuesday with Abbas as well.

Kerry said that the U.S. believes that “it would be better not to be” announcing new settlement construction, “but there are realities within life in Israel that also have to be taken into account here going forward. President Abbas understood that coming into these talks.”

Kerry added that there is “urgency” in getting to the final status discussions of borders and security in the talks which were scheduled to begin on Wednesday.

“If you resolve the borders of Israel – and you can only do that also resolving the security issues for Israel – you have resolved any questions about settlements, because then you know what is in Israel and what is not. And so the sooner we get to that discussion the better,” he said.

On Tuesday night Israel released 26 Palestinian prisoners as part of a deal to restart negotiations. The negotiations reportedly got underway at an undisclosed location in Jerusalem, under a complete media blackout.