Mideast Quartet envoy Tony Blair expressed optimism on a settlement freeze agreement in the near future, that will pave the way for renewed regional peace talks.

Followings talks with Israeli officials in recent days, Blair told the British Independent: "I hope and believe... we can get a political negotiation launched on satisfactory terms."

He added that, "the thing that gives me some optimism about it is that in the discussions I have had with the Israeli leadership in the last couple of days, there is an assumption that it is sensible to start such negotiations."

Regarding the issue of a settlement construction freeze, the Quartet envoy said he hopes the gaps can be bridged, but gave no further detains on the formula he said would lead to a breakthrough.

Blair mentioned the positive steps Israeli Prime Minister Benjamin Netanyahu's government has taken, including easing movement for Palestinian in the West Bank, but warned "it's all pretty fragile unless there is political progress".

The envoy also addressed claims that the Israeli government was torpedoing Palestinian plans to set up a new mobile network in the West Bank, saying he pressed Netanyahu on the issue this week and now believes "it will happen".

He also urged Israel to grant the entry of urgently needed good into the Gaza Strip to repair electricity, water and sewage infrastructure damaged during Operation Cast Lead.

Despite Wednesday's meeting between Israeli Deputy Vice Prime Minister Silvan Shalom and Palestinian National Economy Minister Bassem Khoury, Blair said there was "still a huge distance to go".

'Talks not at any price'

Minister Shalom on Thursday expressed his objection to a settlement freeze according to the American demands as a precondition for opening talks with the Palestinians, saying internal Israeli agreement was needed before deals with foreign bodies can be made.

"It must be clear that these agreements that they are talking about right now – the freezing of settlements – do not undermine the situation at home," he said.

"There is a line of objectors to this, in the government, in the coalition, and certainly among Likud supporters and settler heads. We should not pay a heavy price before talks are opened."

Minister Shalom said he does not believe that the prime minister will "not have a hand in stopping the settlement enterprise, that was established by the Likud and serves and one of its banners. I do not believe that the Likud will be the one to destroy it.

"Holding political dialogue is important, but there is no point in making unilateral concessions in advance. Preconditions should not be accepted," he said.

Shalom added that the Palestinians must understand that starting peace talks is as much a need of theirs as it is of Israel. "Just as they have realized that not holding economic peace talks harms only them, they will realize this as well.

"There can't be talks at any price, and certainly not at a price that is unacceptable to the coalition and the government in Israel."