Palestinian women are pictured through a hole in tarpaulin providing shade as they wait to cross toward Jerusalem through Israel's Qalandiya checkpoint, outside the West Bank city of Ramallah during the third Friday of the holy month of Ramadan. [Mohamad Torokman / Reuters]

Israeli Prime Minister Benjamin Netanyahu has proposed meetings with Palestinian President Mahmoud Abbas every two weeks to improve the prospects of Middle East peace talks, a diplomatic source said on Friday.

Netanyahu, set to travel to Washington next week for direct talks, intends "to handle the negotiations personally", the source said, speaking on condition of anonymity.

Chief Palestinian negotiator Saeb Erekat said of Netanyahu's plan: "It is premature to talk about this now."

The proposal had been passed on to Washington, where the two leaders are due to attend a dinner with US President Barack Obama on Sept 1.

Abbas and Netanyahu will start negotiations the following day after months of indirect contacts. There remains deep scepticism about whether they can reach a deal.

US Secretary of State Hillary Clinton said the United States believed all major issues could be resolved within a year. But Netanyahu's own foreign minister said there was virtually no chance of reaching a deal in that time frame.

The negotiations could stumble as soon as Sept 26, when a 10-month limited Israeli moratorium on new housing starts in Jewish settlements in the occupied West Bank expires.

Abbas, whose authority has been limited to the West Bank since Hamas Islamists took control of the Gaza Strip in 2007, has threatened to pull out of the talks if Israel presses ahead with settlement construction.

The United States opposes settlement expansion but has stopped short of calling for Netanyahu to extend the moratorium, a move that could cause cracks in his governing coalition dominated by pro-settler parties including his own.

Instead, it has urged both Israel and the Palestinians not to take measures that could jeopardize the negotiations and said the settlement issue would be raised in next week's talks.

Under Netanyahu's proposal, he and Abbas would meet once every two weeks to "try to reach quiet understandings on the key issues, and afterwards the two teams will discuss the details", the diplomatic source said.

The source said Netanyahu had chosen a small team of advisers with attorney Yitzhak Molcho as chief negotiator.

An Israeli official quoted Netanyahu as saying: "The only serious negotiations in the Middle East are direct negotiations, calm and continuous, between the leaders on the fundamental subjects."

A similar formula was used in peace negotiations between Netanyahu's predecessor, Ehud Olmert, and Abbas, who in a series of meetings talked privately every few weeks.

The Olmert-Abbas talks, launched at a conference in 2007 that was also in the United States, came close to producing a final deal, both leaders said at the time.

But the negotiations fell apart when the scandal-plagued Olmert was forced to resign. They collapsed after Israel launched an offensive in the Gaza Strip in late 2008.

Many of the meetings were at Olmert's official residence, but Olmert also became the first Israeli premier to travel to the West Bank since 2000, meeting Abbas in Jericho.