Testifying before a Senate subcommittee just as Israel wrapped up tight elections, Pompeo declined to respond when Democrats asked him to back a two-state solution.
"Ultimately the Israelis and Palestinians will decide how to resolve this," Pompeo replied.
Pompeo said that President Donald Trump's aides Jared Kushner and Jason Greenblatt would soon lay out a proposal "to resolve a problem that's been going on for decades and decades that previous administrations couldn't solve."
"We're hopeful that we have some ideas that are different, unique, which will allow the Israelis and the Palestinian people to come to a resolution of the conflict," Pompeo said.
Kushner, who is also Trump's son-in-law, has close family ties to Netanyahu, who was locked in a tight race to remain prime minister against centrist former military chief Benny Gantz.
Days before the election, Netanyahu broke precedent by saying that he would annex at least parts of the occupied West Bank.
Unilateral annexation "indicates no agreement with the Palestinians," Senator Chris Van Hollen, a Democrat from Maryland, told Pompeo.
"It sounds like you've already abandoned what has been a bipartisan foreign policy of opposing the annexation of any or all of the West Bank by Israel," he said.
Trump has strongly supported Netanyahu and taken a series of major actions long sought by Israel, including recognising Jerusalem as capital of the Jewish state.
Gantz criticised Netanyahu's annexation pledge, calling it "irresponsible" and questioning why a prime minister who has served for 13 years was making such a historic decision on the eve of an election.
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