Israel may agree to a West Bank settlement freeze by mid-September and is discussing the technical aspects of a deal with the United States, EU foreign policy chief Javier Solana said on Monday.

Solana also said after meeting the Israeli premier that a summit between the US, Israeli and Palestinian leaders to relaunch the dormant peace process could take place on the sidelines of the UN General Assembly at the end of September.

"I spoke to the prime minister (Benjamin Netanyahu)... I got the clear sentiment that there is a possibility to get to an agreement before the beginning of the General Assembly that will allow us to resume negotiations," he told reporters.

"I hope we will arrive at some agreement sufficiently constructive (for) the meeting in New York of three parties" to take place, added Solana, who was meeting Israeli and Palestinian leaders on Monday as part of a regional tour.

Israeli officials have been engaged in intensive talks with President Barack Obama's Middle East envoy George Mitchell as Washington presses its close ally to halt settlement activity in the occupied West Bank and east Jerusalem.

After meeting Netanyahu in London last week, Mitchell was set to hold another round of talks with Israel officials in Washington on Monday.

"Today in Washington there is another round of meetings of technical nature to see how some of the open issues could be dealt... the definitions of some of the questions related to settlements more on the technical side rather than the political side," Solana said.

"We would like to have this finalised more or less by the 18 or 19 of September," he added.

According to press reports over the past several days, Israel could agree to a temporary and limited freeze, with east Jerusalem exempted and projects already under way allowed to continue.

Senior Palestinian Authority official Nabil Shaath told reporters on Monday that Palestinians will not accept a partial settlement freeze.

"If Obama approves continuing settlement building in Jerusalem, Obama has pulled out of the Middle East peace process," he said.

Shaath also reiterated that the Palestinians would not recognise Israel as a Jewish state, as demanded by Netanyahu as part of a final peace deal.