The Israelis have never confirmed they have nuclear weapons, but this has been widely assumed since a scientist leaked details in the 1980s.
He also described Israeli treatment of Palestinians as "one of the greatest human rights crimes on earth".
Mr Carter gave the figure for the Israeli nuclear arsenal in response to a question on US policy on a possible nuclear-armed Iran, arguing that any country newly armed with atomic weapons faced overwhelming odds.
The US, a key ally of Israel, has in general followed the country's policy of "nuclear ambiguity", neither confirming or denying the existence of its assumed arsenal.
Palestinian President Mahmoud Abbas has accused US President George W Bush of bias towards Israel, "What the president said at the Knesset made us angry, and to be honest, we don't accept it," Mr Abbas said.
"We had many things to say about it, and we told him this when we met him yesterday, because we speak with him openly, honestly and transparently. We have asked him to maintain a balanced position," Mr Abbas said.
Mr Bush had told Israeli politicians that the US was their closest ally, and that their country was a "homeland for the chosen people".
Few Palestinians regard President Bush as an honest broker, and his latest visit to the region seems to have reinforced that view, says the BBC's Aleem Maqbool in Ramallah in the West Bank.
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