Israel's Benjamin Netanyahu will propose holding direct talks with Palestinian leader Mahmud Abbas when he meets prime minister Salam Fayyad in Jerusalem next week, his office said on Wednesday.

The Israeli prime minister is to hold a rare meeting with his Palestinian counterpart and two other senior officials from Ramallah in Jerusalem on April 17, a spokesman from his office said earlier.

It will be the first top-level meeting between the two sides since the peace process ground to a halt more than 18 months ago in a bitter dispute over Jewish settlement building.

At the meeting, Netanyahu is to propose "raising the level of talks" and holding face-to-face negotiations with Abbas, his office said.

"At his meeting next week with the Palestinian delegation, Prime Minister Benjamin Netanyahu will propose raising the level of the talks to conduct them directly with Abu Mazen," it said, using Abbas's nom-de-guerre.

"This message will also be passed on through his personal envoy, the lawyer Yitzhak Molcho, who is expected to meet with Abu Mazen and hand him a letter with Israel's position on a future agreement with the Palestinians," it said, referring to the head of the Israeli negotiating team.

Israel and the Palestinians are expected to exchange letters in the coming week, with each side outlining its demands for a resumption of peace talks.

But Abbas's political adviser appeared less than impressed with Netanyahu's proposal.

"If Netanyahu wants to meet President Abbas, he must first announce that he's stopping settlements," Nimr Hammad told AFP in a clear sign the Palestinians were not backing down from their central demand for resuming talks -- that Israel halt its settlement building.

For the Palestinians, it was the issue of Jewish settlements which caused the latest attempt at direct negotiations to break down just weeks after they were launched to great fanfare in September 2010.

Since then, international efforts to draw the two sides back into dialogue have repeatedly failed to gain traction.

A year after the talks collapsed, diplomats from the Quartet of Middle East peacemakers issued a fresh call for a return to direct talks but there has been little movement since then.

Top Quartet diplomats met in Washington on Wednesday in their latest attempt to find a way out of the deadlock, but the meeting ended with a bland statement urging both sides to merely "strengthen and improve the climate for a resumption of direct negotiations."

The statement was welcomed by Israel but the Palestinians were less than enthusiastic.

"Israel welcomes the Quartet statement calling for a continuation of direct talks between Israel and the Palestinians without preconditions," Netanyahu's office said.

But Palestinian negotiator Saeb Erakat said the Quartet needed to find a way of dealing with the issue of settlements.

"The Quartet needs a mechanism to compel Israel to stop settlement and to act on the two-state solution," he told AFP.

The last time Abbas and Netanyahu met was at the end of September 2010.

Since then, there have been no top level meetings, although the negotiators held five exploratory meetings in January, aimed at seeking a way back to the negotiating table. They ended inconclusively.

Next week's rare encounter between Netanyahu and Fayyad will be the first high-level talks in more than 18 months.

"The meeting will take place in Jerusalem, probably at the prime minister's office," Netanyahu's spokesman Ofir Gendelman told AFP earlier on Wednesday, confirming the two would meet on April 17.

Fayyad is expected to personally deliver a letter from Abbas outlining his conditions for returning to direct negotiations, namely an end to settlement building, and Israel's acceptance of the pre-1967 lines as the basis for discussing future borders.

Netanyahu's office on Wednesday said the premier was also preparing his own letter for Abbas, which would be handed over by Molcho when the two meet later this month at a date which has yet to be set.

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