It triggered a furious response from Jewish groups in the United States.
The American Jewish Committee said Mr Peretz’s comments were “offensive and unhelpful”, while Jonathan Greenblatt from the Anti-Defamation League said they were “inconceivable”.
Meanwhile, political analyst Arsen Ostrovsky said the remarks were “indeed most unfortunate” but added that the minister’s wider point “remains — sadly — accurate. The alarming rate of intermarriage is a very dangerous trend, with many young Jews becoming increasingly detached.”
Mr Peretz, who leads the Jewish Home party, recently announced the United Right List would run again in the September 17 election.
The far-right Tkuma party has already confirmed its participation, but it is unclear whether the Kahanist Otzma Yehudit will be part of the alliance again.