Israeli Prime Minister Benjamin Netanyahu suggested in an interview published Tuesday that he would not seek to lure the Palestinians back to peace talks by renewing a freeze on settlement building.

"We already gave at the office," Netanyahu told The Jerusalem Post, referring to a 10-month partial settlement freeze that expired in late September 2010.

Peace talks with the Palestinians began nine months into the freeze, but ground to a halt shortly after the moratorium expired.

Netanyahu's comments came after the international peacemaking Quartet called Friday on both sides to return to peace talks within a month, with the goal of securing a deal before the end of 2012.

But the Palestinians say they will not hold talks while Israel builds on land they want for a future state, a position repeated by Palestinian president Mahmud Abbas on Sunday as he returned to the West Bank after submitting a bid for full UN membership in New York.

Netanyahu told the Post that the settlement issue was a "pretext."

"It is a pretext they use again and again, but I think a lot of people see it as a ruse to avoid direct negotiations," he said.

And the Israeli leader said he had no intention of interfering with plans for the construction of 700 new homes in the east Jerusalem settlement neighbourhood of Gilo, which could be approved on Tuesday.

"I don't think there is anything new," he said of the planned building.

"We plan in Jerusalem. We build in Jerusalem. Period. The same way Israeli governments have been doing for years -- since the end of the 1967 war," he added.

"We build in Jewish neighbourhoods, the Arabs build in Arab neighbourhoods -- that is the way the life of this city goes on and develops for its Jewish and non-Jewish residents alike."

Netanyahu told the Jerusalem Post that the crux of the failure of talks lay in the refusal of the Palestinians to recognise Israel as a Jewish state.

"Of course it matters -- this is what this conflict is all about. It is not about the settlements; it is about the Jewish state. And it must be said over and over again," he said.

The prospect of a new settlement freeze is also anathema to much of Netanyahu's rightwing governing coalition, with his hawkish Foreign Minister Avigdor Lieberman vocally opposed.

Netanyahu was due to meet Tuesday with the Group of Eight, a grouping of his cabinet ministers, to discuss the Quartet's peace talks proposal, Israeli radio reported.