"We would not be here today at the precipice of such a dangerous move if the Obama Policy in the Middle East wasn`t naive, arrogant, misguided and dangerous," Perry in his first major foreign policy address in New York since emerging as the top Republican White House hopeful.
"We are indignant that certain Middle Eastern leaders have discarded the principle of direct negotiations between the sovereign nation of Israel and the Palestinian leadership, and we are equally indignant that the Obama Administration?s Middle East policy of appeasement has encouraged such an ominous act of bad faith," he said.
Television commentators said that this was the strongest ever criticism of Obama`s foreign policy.
Perry`s remarks came as US and other Western diplomats were engaged in "intensive" last minute discussions to avoid a showdown over Palestinian leaders` bid to gain recognition for their country at the UN.
"The Obama Policy of moral equivalency, which gives equal standing to the grievances of Israelis and Palestinians, including the orchestrators of terrorism, is a dangerous insult," Perry said.
"America should not be ambivalent between the terrorist tactics of Hamas and the security tactics of the legitimate and free state of Israel. By proposing indirect talks through the US rather than between Palestinian leaders and Israel, this administration encouraged the Palestinians to shun direct talks," Perry alleged.
Perry said it was wrong for this Administration to suggest the 1967 borders should be the starting point for Israeli-Palestinian negotiations.
"When you consider this suggestion was made on the eve of the Israeli Prime Minister`s visit, we see in this American Administration a willingness to isolate a close ally and to do so in a manner that is insulting and naive," he said.
The Texas Governor demanded that Palestinian leaders must publicly affirm Israel`s right to exist, and to exist as a Jewish state; its President Abbas must persuade all factions including Hamas to renounce acts of terrorism and release kidnapped Israeli Gilad Shalit, and; Palestinian statehood must be established only through direct negotiations between the Palestinian leadership and the nation of Israel.
Speaking on Iran, Perry said the US must stop Tehran from acquiring nuclear weapons and all options must remain on the table to stop a brutally repressive regime from acquiring a nuclear capability.
"To date, we have fumbled our greatest opportunity for regime change. As average Iranian citizens were marching on Tehran in the Green Revolution in 2009, America was wasting precious time on a naive policy of outreach to both the Iranian and Syrian governments," Perry said.
"Who knows what the leadership of Iran would look like today if America had done everything in its power to provide diplomatic and moral support to encourage the growing movement of dissidents who sought freedom," he said.
"Our actions in recent years have destabilized the Middle East. We have been complacent in encouraging revolt against hostile governments in Iran and Syria and we have been slow to recognize the risks posed by the new regime in Egypt and the increasingly strained relationship between Israel and Turkey," Perry said.
He said the muddle of a foreign policy has created greater uncertainty in the midst of the "Arab Spring."
The US policy of isolating and undermining Israel has only encouraged its adversaries in their aggression, he alleged.