Israel's prime minister is proposing a 10-month freeze on West Bank settlement construction in what he says is an attempt to jump-start Mideast peace talks.

But Palestinians rejected the proposal by Benjamin Netanyahu even before it was formally unveiled Wednesday, saying it was unacceptable because it did not include east Jerusalem.

Israeli Prime Minister Benjamin Netanyahu in August 2009. (Sebastian Scheiner, pool/Associated Press)Israeli construction in settlements in the West Bank and east Jerusalem has been a key sticking point in U.S. efforts to restart peace talks. The Palestinians say they will not return to the negotiating table without a complete halt to construction in both areas, which they claim for a future independent state.

Netanyahu presented his proposal to his security cabinet, a small group of senior cabinet ministers and top security officials. The group was supposed to vote on the proposal later Wednesday.

"It's not a simple step, not easy. But it has far more advantages than disadvantages," Netanyahu said.

"It allows us to present before the world a simple truth: the Israeli government wants to enter negotiations with the Palestinians, is taking practical steps to enter negotiations and is very serious about its intentions to promote peace."

Under pressure

Israel has been under heavy international pressure to halt its construction in settlements built on captured lands claimed by the Palestinians. Some 300,000 Israelis live in the West Bank, and about 180,000 people live in Jewish neighbourhoods in east Jerusalem.

Netanyahu already has promised not to build any new West Bank settlements, and he has floated the idea of suspending construction in existing ones. Wednesday's offer was the first time he has given a firm timeline for how long he is willing to halt construction.

The offer, however, appears to have key limitations. Netanyahu, a traditional ally of the settler movement, has argued that some construction should be permitted to allow for "natural growth" in the communities. His latest offer apparently would not affect the roughly 3,000 homes already planned or being built.

More critically, it did not make any mention of east Jerusalem. The competing claims to the eastern part of the city — home to Jewish, Muslim and Christian holy sites — is the most intractable issue in the Israeli-Palestinian conflict.

Israel considers all of Jerusalem its eternal capital, and Netanyahu has repeatedly said he will not agree to share control of the city.

Netanyahu's announcement had been rumoured for days. Ahead of his formal announcement, Palestinian presidential adviser Nabil Abu Rdeneh said the proposed freeze would be unacceptable if it didn't include east Jerusalem.

"Any Israeli offer that doesn't include Jerusalem will be rejected immediately," he said in a phone interview from Argentina, where he was travelling with Palestinian President Mahmoud Abbas. "No Palestinian, no Arab can cross this line."

Abbas has been on a tour of South America, meeting with foreign leaders to discuss the Middle East.

Abbas told reporters in Argentina on Wednesday he will stay on as president until a new vote, but reiterated that he will not run for re-election.

"At any time we have the election, I will go away and will not run," Abbas said, according to Reuters.

Palestine's election body advised delaying elections after disagreements about election details between Hamas and Abbas's Fatah movement went unresolved.

"If there will be any consensus between us and Hamas after one month or two months, we are ready ... to conduct the elections immediately," Abbas told reporters.