Palestinian officials have threatened to sue Israel through international bodies if it continues expanding illegal settlements in the occupied territories, warning it was an issue that could scupper fledgling talks.

"These are not just dots on a map," Hanan Ashrawi, a Palestinian Liberation Organisation executive committee member, said on Wednesday, of the more than 2,000 new illegal settler homes which were approved for construction ahead of the resumption of negotiations late last month.

"These are wilful and destructive measures to prevent the creation of a Palestinian state. If Israel carries out these plans [...] we will be forced to [have] recourse to international judicial processes through international institutions," she told reporters near the illegal settlement neighbourhood of Gilo, south of Jerusalem, where many of the new units are to be built.

Israeli and Palestinian negotiators held a new round of talks in Jerusalem on Tuesday, their second since the resumption of direct negotiations in Washington late last month, which came after a nearly three-year gap.

The last talks, in September 2010, broke down over the issue of illegal settlement expansion.

"There has been no breakthrough and no agreement. Discussions have not been on specifics," Ashrawi said of the resumed talks.

Details of the discussions have not been revealed at the request of US mediators, who asked last week for a strict news blackout.

Ashrawi warned that Israeli illegal settlement building threatened once again to torpedo negotiation efforts.

"We are not prepared to make the same mistakes and to have talks for their own sake as Israel continues [...] unilateral measures" such as further illegal settlement building, she said.

Threat to talks

An official in Israeli Prime Minister Binyamin Netanyahu's office told the Associated Press that the Palestinians had promised to suspend their UN campaign during the negotiations, which are envisioned to last up to nine months.

If they break that promise, they would violate one of the commitments that helped restart talks, said the official, who spoke on condition of anonymity in line with briefing regulations.

Ashrawi acknowledged that US Secretary of State John Kerry had asked the Palestinians not to join UN agencies or turn to the International Criminal Court during the negotiations.

The Palestinians have threatened to pursue war crimes charges over Israeli settlement building in the court if peace efforts fail.

Ashrawi said Abbas linked the suspension of the UN campaign to Israel's promise to release 104 long-held Palestinian prisoners, not to the talks.

So far, Israel has freed 26 prisoners and the rest are expected to be freed in three more stages in coming months.

She urged the United States to take a firm stance against the illegal settlements, following the example of the EU.

The EU published guidelines last month forbid its institutions from dealing with or funding any illegal settlements in the West Bank.

Israeli Prime Minister Netanyahu on Friday played down the illegal settlements issue.

"The root cause [of the conflict] was and remains the persistent refusal to recognise the Jewish state in any boundary," he said.

"It doesn't have to do with the settlements, that's an issue that has to be resolved, but this is not the reason that we have a continual conflict."

Source: Agencies