Palestinian president Mahmud Abbas said Tuesday that he would extend faltering peace talks with Israel only if it agreed to conditions, including a settlement freeze, which it promptly rejected.

"He who makes such conditions does not want peace," a senior Israeli official told AFP on condition of anonymity.

Abbas listed his demands during a meeting with Israeli journalists at his headquarters in the West Bank just a week before a nine-month target for a peace deal.

His comments came as US envoy Martin Indyk went into a new meeting with Israeli and Palestinian negotiators in a bid to save the US-sponsored talks from collapse.

Abbas said he would agree to an extension of negotiations beyond the April 29 deadline if Israel frees a group of prisoners as previously earmarked for release and discusses the borders of a future Palestinian state.

"There must be a total freeze of settlements," by Israel in the occupied West Bank including annexed east Jerusalem, Abbas said.

"The borders between Israel and the state of Palestine must also be defined within a month, two or three," if the talks are to be extended, he said.

The Palestinians have long viewed Israeli settlement construction as a major obstacle to peace talks, arguing that Israel is actively building on land that should be part of their future state.

The peace process was engulfed by crisis last month after Israel refused to free a fourth and final group of 26 veteran Arab prisoners which would have completed an agreement that brought the sides back to negotiations last July.

But the senior Israeli official told AFP that settlement building in Jerusalem would not be frozen and that Israel had never agreed to discuss the border issue separately from other core issues.

These include Palestinians refugees, the fate of Jerusalem, which both sides claim as a capital, security and mutual recognition.

"It is impossible to define borders before an agreement on the other issues," the Israeli official said.

He also reiterated that Israel planned on expelling towards the Hamas-run Gaza Strip, or abroad, some of the last batch of prisoners that Abbas wants freed.

"This has been clearly explained to the Palestinians. Never has Israel committed not to carry out expulsions," he said.