"The reality is that the overwhelming majority in the world agrees with the position of two states living side by side in peace, but we have a problem of a country that is defying all of that," said Zuma.
"We reiterate our call for the total cessation of all settlement activities," he told a joint news conference with Abbas.
Criticising the way the United Nations works, he added: "I don't think the system should allow that one country can defy the world."
South Africa was ready to assist with negotiations between Israel and the Palestinians and had appointed two special envoys for the task, Zuma added.
Abbas said the Palestinians sought to benefit from South Africa's "successful experiences" in building an independent state.
"We are the last nation in the world that is still living under occupation," he said.
Zuma's ruling African National Congress is a firm supporter of the Palestinian cause, with politicians regularly comparing Israel to the former racist apartheid state in South Africa.
The white minority government had cooperative relations with Israel, but when Nelson Mandela was elected first democratic president in 1994, he pledged to support Palestine, saying: "South Africa's freedom is incomplete without the freedom of the Palestinians."
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Abbas was greeted with a 21-gun salute at the Union Buildings in Pretoria, South Africa's administrative capital.
He has visited South Africa before -- last year he attended Mandela's funeral -- but officials said this is his first state visit.
"People of South Africa and Palestine have a strong bond built in the trenches of our two struggles, we want to build even stronger relations and cooperation based on that historical relationship," said Zuma.
In their talks, the two leaders signed an agreement to set up a forum to exchange views on common political matters, and cooperation in higher education and training.
Abbas's visit comes days after UN chief Ban Ki-moon urged Israel and the Palestinians to "step back from the brink" and return to peace talks amid European moves toward recognising Palestine.
His comments reflected international alarm over the spate of violent attacks in east Jerusalem and the deadlock over peace talks that are fuelling fear of another flareup after the war in Gaza earlier this year.
With no political solution in sight, governments and parliaments in Europe are moving towards Palestinian recognition, with France's National Assembly set to vote on a non-binding resolution on December 2.
That follows Sweden's announcement that it will recognise Palestine and non-binding votes in the British and Spanish parliament in favour of recognising Palestinian statehood.
South Africa and Palestine established diplomatic relations in 1995 following the end of apartheid in 1994. Abbas ends his visit on Friday.