Israeli radio and news sites quoted him as telling parliament's Foreign Affairs and Defence Committee that Washington initially asked Israel to extend a 10-month building freeze which expired in September.

"The truth is that we were prepared to do this but contrary to what was reported Israel did not refuse to extend the freeze," Maariv daily's "nrg" website quoted Netanyahu as telling lawmakers.

"In the end the United States decided not to take that path, rightly in my opinion," he added.

Haaretz daily's website quoted Netanyahu as saying he told US President Barack Obama he would ask his cabinet to approve a three-month extension.

"I told Obama that I am prepared to go with this to the cabinet and that I will be able to enforce the move, but then I received the surprising phone call from the Americans who said they no longer demand that Israel extends the freeze," the paper quoted him as telling the committee on Monday.

Netanyahu said in November he would put the US request to a cabinet vote if incentives from Washington were put in writing, among them finance for advanced warplanes and a promise to veto any UN Security Council resolution against Israel's interests.

That letter apparently never came.

US officials admitted last month that efforts to coax Israel into imposing new curbs on West Bank settlement construction had gone nowhere.

State Department spokesman Philip Crowley did not comment on Netanyahu's remarks.

"As we indicated late last year, we were focused on a moratorium extension," Crowley said.

"Based on our engagement with the parties, for a variety of reasons, we felt that that was no longer, at this time, a basis to move forward. And we are focused on a different path at this point," he said.

Netanyahu on Monday said that senior Obama aide Dennis Ross would visit Israel this week, and confirmed he would visit Egypt for talks with President Hosni Mubarak.

"This week the envoy Dennis Ross and other American envoys will arrive. On Thursday I shall go to Egypt," he told senior members of his Likud party in remarks broadcast on public radio. "We have a single aim, to strengthen security and to move toward achieving peace."

Mubarak has publicly blamed Israel for the collapse of peace talks, and has urged the international community, especially the United States, to move the process forward.

Without a new freeze, the Palestinians have refused to negotiate, effectively deadlocking direct peace talks that began on September 2, only to run aground three weeks later when settlement building resumed.

"We have been pursuing a moratorium as a means to create conditions for a return to meaningful and sustained negotiations," US State Department spokesman Philip Crowley said on December 7.

"After a considerable effort, we have concluded that this does not create a firm basis to work towards our shared goal of a framework agreement."

Haaretz on Sunday quoted an unnamed Israeli official as saying that a US counterpart told him Washington was deeply disappointed with Israeli Defence Minister and Labour party leader Ehud Barak for failing to deliver on promises that he could win government approval for a fresh freeze.

Some Labour ministers in Netanyahu's right-dominated coalition government are calling for Barak to take Labour out of the government if there is no progress towards peace talks.

Palestinian president Mahmud Abbas wants the international community, spearheaded by the peacemaking Quartet of the United Nations, the United States, Russia and the European Union, to come up with a new peace plan.

"We demand that the Middle East Quartet and the various UN bodies, headed by the Security Council, draft a peace plan which conforms with international law, instead of keeping up negotiations which do not solve the problem," he said in a televised address last week.

Netanyahu said on Sunday that he was prepared for an immediate resumption of face-to-face talks with Abbas "until white smoke emerges," a statement from his office said.

If Abbas were to accept the invitation, it quoted Netanyahu as saying, they could discuss all key aspects of the dispute.

"We shall very soon know if we shall be able to reach an agreement," Netanyahu said.

On Monday Abbas said in Tunis he was "always ready" to continue peace talks as soon settlement building stops.

"We are always ready to continue negotiations in the event that Israel comes to accept the stopping of its settlement plans," Abbas said after talks with Tunisian President Zine El Abidine Ben Ali.

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