Israel is willing to begin new peace talks using the 1967 lines as a basis for negotiations, if the Palestinians drop their UN membership bid, an Israeli government official confirmed on Tuesday.

Speaking on condition of anonymity, the official confirmed that Israel has been working with Washington and members of the international peace-making Quartet to draw up a new framework that could relaunch stalled talks.

The package of principles is intended to draw Palestinians back to the negotiating table and head off their plan to seek United Nations membership for a Palestinian state on the lines that existed before the 1967 Six-Day War.

The framework negotiations were first reported by Israeli media on Monday night, but an Israeli government official confirmed the details to AFP on Tuesday morning.

"Over the last few weeks there has been an ongoing attempt to restart the peace process to allow for the resumption of direct talks between Israel and the Palestinians," he said.

"The assumption is that if this process succeeds, the Palestinians will withdraw their proposal for unilateral action at the UN."

The framework being discussed is based on a speech made by US President Barack Obama to the pro-Israel lobby group AIPAC earlier this year.

In that address, Obama called for the negotiations that would create borders for "Israel and Palestine... based on the 1967 lines with mutually agreed swaps."

He said he was not asking Israel to return to the lines that existed before the 1967 war, when Israel captured the West Bank, Gaza and east Jerusalem, and that he expected a final deal to take account of "new demographic realities," a reference to Israel's settlement-building since that time.

"The ultimate goal is two states for two people: Israel as a Jewish state and the homeland for the Jewish people and the state of Palestine as the homeland for the Palestinian people."

"That is the sort of language that we can live with," the Israeli official said.

On Monday, Prime Minister Benjamin Netanyahu told a closed-door meeting of the Foreign Affairs and Defence Committee that "we are interacting with the US to put together a document using language from Obama's second speech" to AIPAC, The Jerusalem Post newspaper reported.

Talks between Israel and the Palestinians have been on hold for nearly a year, grinding to a halt shortly after they began in 2010 over the issue of settlement construction.

Israel has declined to renew a partial settlement freeze that expired shortly after the talks began, and the Palestinians have said they will not negotiate while Israel builds on land they want for a future state.

With talks on ice, they have instead pushed forward with a plan to seek UN membership for a Palestinian state this September.

Palestinian president Mahmud Abbas has insisted that the plan does not rule out the possibility of new peace talks, but said the Palestinians will only return to the negotiating table if settlement building is frozen and a clear set of parameters for any new talks is agreed upon ahead of time.