* Will replace Hillary Clinton in revamped Obama Cabinet
* Kerry is a critic of Israeli settlement policies
By Ori Lewis
JERUSALEM, Dec 22 (Reuters) - Israeli Prime Minister Benjamin Netanyahu on Saturday welcomed the appointment of his personal friend John Kerry as U.S. secretary of state and described him as "a known supporter of Israel's security".
President Barack Obama nominated Kerry on Friday, calling the veteran U.S. senator the "perfect choice" as America's top diplomat.
Netanyahu said in a statement: "I congratulate John Kerry on being chosen for the position of U.S. Secretary of State. Kerry is very experienced and is a known supporter of Israel's security."
But Netanyahu may find Kerry no less critical than his predecessor of Israel's policy of settlement building in the occupied West Bank, an area Palestinians want as part of a future state.
"When new settlements go up ... it undermines the viability of a two-state solution," Kerry told a Senate hearing.
Kerry will be the leading Cabinet member charged with tackling pressing global challenges, including trying to restart the stalled Israeli-Palestinian peace talks and Iran's nuclear standoff with the West.
Netanyahu, who has had frosty ties with Obama, also mentioned his good personal relations with Kerry in his statement.
"John Kerry and I are friends for many years and I greatly appreciated the fact that half a year ago, after the death of my father, he came to visit me during my mourning. I look forward to cooperating with him," he added.
While Obama put one important piece of his revamped cabinet in place, he held off on naming a new defense secretary.
The delay came in the face of a growing backlash from critics of former Republican Senator Chuck Hagel, who is considered a leading candidate to replace Leon Panetta at the Pentagon.
Officials in Netanyahu's office have privately voiced concern over the possibility that Hagel might take over at the Pentagon.
Some American Jewish leaders contend that Hagel, who left the Senate in 2008, at times opposed Israel's interests, voting several times against U.S. sanctions on Iran, and made disparaging remarks about the influence of what he called a "Jewish lobby" in Washington.
Asked last week about a statement by Hagel in 2006 that the "Jewish lobby intimidates a lot of people here," Senator Lindsey Graham of South Carolina said he would "have to answer for that comment" if he is nominated.
"And he'll have to answer about why he thought it was a good idea to directly negotiate with Hamas and why he objected to the European Union declaring Hezbollah a terrorist organization," said Graham, a member of the Senate Armed Services Committee. (Additional writing by Matt Spetalnick in Washington; Editing by Stephen Powell)