President Shimon Peres on Sunday urged Israel to resume peace talks with the Palestinians, saying their president Mahmud Abbas was a willing partner with whom an agreement could be reached.

Speaking with Israeli diplomats at his Jerusalem residence, Peres said the only way the Jewish state could positively affect the fluctuating reality in the region was "to complete the peace agreement with the Palestinians."

"I know there are different opinions," he said. "This is not a matter of ideology, this is a matter of appraising" the situation.

"I have known Abu Mazen for 30 years, and nobody will change my opinion of him," Peres continued, using Abbas's nom de guerre.

"I know there is criticism of things Abu Mazen said," Peres continued, but "there is currently no other Arab leader who is saying he is in favour of peace, against terror, in favour of a demilitarised state, and of... the Palestinian consensual right of return."

"There is not much time left," he warned.

Talks between the Israel and the Palestinians have been on hold since September 2010, with the Palestinians insisting on a settlement freeze before returning to the negotiating table and the Israelis insisting on no preconditions.

Following last month's historic United Nations vote giving the Palestinians upgraded status in the world body, Israel announced a new spate of settlement building in the West Bank and Israeli-annexed east Jerusalem.

Peres's remarks elicited a harsh response from Prime Minister Benjamin Netanyahu's Likud party, which is contesting January 22 elections on a joint list with ex-foreign minister Avigdor Lieberman's ultra-nationalist Yisrael Beitenu party.

"It is very saddening that the president chose to express a personal political opinion that is contrary to the Israeli public's stance on Abu Mazen, the peace refuser," a statement from the party read.

"The prime minister has called on Abu Mazen to return to the negotiating table dozens of times," it read, saying the Palestinian leader "prefers to join forces with Hamas and act against Israel in every possible sphere."

Netanyahu himself, however, softened his party's line a few hours later.

"I respect the president, I value him," he told Channel 2 television. "There is a variety of opinions, we exchange opinions on topics on the agenda."

Lieberman, who resigned as Israel's top diplomat earlier this month, following indictments on fraud and breach of trust, has consistently said Abbas is not interested in reaching a peace deal with Israel.

He has also described Abbas as an obstacle to negotiations, suggesting it would be better for the Palestinian leader to step down.