US Secretary of State John Kerry has returned to the Middle East to try to salvage negotiations brought to the brink of collapse due to a dispute over the release of Palestinian prisoners by Israel.

Kerry was holding late-night talks with Israeli Prime Minister Benjamin Netanyahu, in Jerusalem on Monday evening.

However, he has not met Palestinian President Mahmoud Abbas, speaking instead to the chief Palestinian negotiator, Saeb Erekat, in Jerusalem. It was not clear whether a meeting with Abbas was scheduled for Tuesday.

Kerry flew in from Paris for what was expected to be little more than a 15-hour visit to push both sides to resolve a lingering dispute over Palestinian prisoners which threatens to derail the negotiations ahead of an April 29 deadline.

Israel has refused to free a group of 26 Palestinian prisoners, as outlined in an agreement which brought the sides back to negotiations in July 2013.

Palestinian officials gave warning it could end the talks unless Israel changes its stance on the prisoner releases.

Palestinian ultimatum

"If we don't get an answer from John Kerry on the prisoners tonight, we'll begin to ask for membership in all UN agencies tomorrow," a Palestinian MP, Mustafa Barghuti, told the AFP news agency after a meeting in Ramallah.

If we don't get an answer from John Kerry on the prisoners tonight, we'll begin to ask for membership in all UN agencies tomorrow.

- Mustafa Barghuti, Palestinian MP

US officials reportedly said Washington has been talking to Israel about the possibility of releasing an Israeli spy, Jonathan Pollard, early from his life sentence as an incentive.

US intelligence agencies have long opposed any early release of Pollard, who pleaded guilty in 1987 to espionage.

Washington has been fighting an uphill battle to coax the two sides into accepting a framework proposal which would extend the negotiations beyond April 29 to the end of the year.

But shortly before Kerry landed, a Palestinian official told AFP that Ramallah had rejected a fresh Israeli offer to extend talks, describing it as "blackmail".

The question of extending the talks has become intricately tied up with the fate of the 26 prisoners.

Just a day before the expected releases, Israel said it would not free those convicted of deadly attacks unless the Palestinians committed to extending the negotiations.

The Palestinians said they would not even discuss an extension unless Israel frees the prisoners.

Source: Agencies