US envoy sees Benjamin Netanyahu in bid to save talks

US president Barack Obama is "more determined than ever" to achieve Middle East peace, his envoy to the region was quoted as saying on Wednesday during talks in Israel aimed at salvaging negotiations with the Palestinians.

There was no sign, in a statement from Israeli prime minister Benjamin Netanyahu's office as he met envoy George Mitchell, of any progress towards a formula that could avert a threatened Palestinian walkout over settlement building.

Mitchell, the statement said, told Netanyahu that Obama and secretary of state Hillary Clinton asked him to deliver a message to Israelis and Palestinians assuring them of their commitment to achieving comprehensive peace in the Middle East.

"Mitchell noted that he knows there will be many bumps along the road but they (Obama and Clinton) are more determined than ever to achieve the common goal of a Middle East with peace and security," the statement said.

Peace talks that began on September 2 were plunged into crisis after a 10-month moratorium on new housing construction in Israeli settlements in the occupied West Bank expired on Monday.

Palestinian president Mahmoud Abbas has threatened to quit the negotiations unless the measure is extended, but has put off a decision until an Arab League forum discusses the issue on October 4.

Netanyahu, whose governing coalition is dominated by pro-settler parties including his own right-wing Likud, had rebuffed calls by Obama and other foreign leaders to extend the partial freeze.

"I am committed and the government is committed to reaching a peace agreement that will preserve the security and vital interests of the state of Israel," Netanyahu said at the meeting with Mitchell, according to the statement.

"We are committed to following this path. I hope the good talks that began with (Abbas) will continue without interruption so that we can try to achieve this goal," the Israeli leader was quoted as saying.

Mitchell, who met Netanyahu at the prime minister's private home in Caesarea, in central Israel, was expected to see Abbas in the West Bank city of Ramallah on Thursday.

Yasser Abed Rabbo, a member of the Palestinian negotiating team, said on Voice of Palestine radio that "Israel alone will shoulder the responsibility for the collapse" of the peace process if it does not halt the construction in settlements.

Failure to keep peace talks alive would be a major political embarrassment for Obama, who faces the prospect of losses by his Democratic party in congressional mid-term elections on November 2.

A senior US official, speaking on condition of anonymity, said the United States was not giving up hope that somehow the process could be rescued.

"We're seeing restraint on both sides and we have a few days where we're hoping that we can work through these issues and keep the talks moving forward. I think they are actually listening very intently to what we're telling them," the official in Washington said on Tuesday.

Netanyahu has held out the prospect of limiting the scope of renewed building in the West Bank, land that Israel captured from Jordan in a 1967 war and which Palestinians want as part of a future state.

Palestinians fear settlements will deny them a contiguous and viable state. Nearly 500,000 Jews live in well over 100 settlements established across the West Bank and East Jerusalem. The World Court deems settlements illegal but Israel disputes this. Some 2.5 million Palestinians live in the same areas.