"There are great risks in what is happening there and the potential of an even greater escalation of violence," Xinhua quoted Kerry as saying in Vienna after days of intensive talks on Iran's nuclear programme.
Kerry said he had decided to cancel a planned trip to Egypt Tuesday and return to Washington, as a Cairo-brokered ceasefire was "on the table".
"We believe that it was important to give this offer an opportunity," Kerry said, adding that "the Egyptians deserve the time and the space to be able to try to make this initiative work, and we hope it will".
Egypt Monday launched an initiative demanding immediate ceasefire in Gaza. But Hamas has rejected the plan, saying it had not been consulted and terms for an end to the conflict had not been reached.
Kerry urged Arab nations to push the Hamas to accept the deal
Kerry urged Arab nations to push the Hamas to accept the deal. "We urge all parties to support this ceasefire, and we ask all the members of the Arab community, to continue to press to try to get Hamas to do the right thing, which is to cease the violence, engage in a legitimate negotiation, and protect the lives of people."
He said he is prepared to fly back to the region if the Egyptians initiative doesn't work.
"We are prepared to do everything in our power to help the parties come together to work to create a climate for genuine negotiations," Kerry said.
The situation worsened in Gaza after three Israeli teenagers believed kidnapped were later found slain, while another teen from the Gaza Strip was also believed abducted and slain, touching off rounds of armed retaliation between Israel and the Islamist Hamas movement controlling the Gaza Strip.
Egypt brokered a truce between Hamas-ruled Gaza and Israel in 2012, during the one-year rein of former Islamist president Mohamed Morsi who was ousted by the military last year.