Israel is considering handing over security responsibilities to Palestinians in additional West Bank towns under U.S.-backed plans for resuming peace talks, Israeli and Palestinian security sources said.

The sources named Abu Dis, a town at the edge of Jerusalem once seen as a possible Palestinian seat of government, as one of the more significant sites where Israel is weighing whether to soon permit armed Palestinian police to patrol.

An Israeli security source said this week it is "an idea Israel is considering" if George Mitchell, U.S. President Barack Obama's Middle East envoy, succeeds in resuming peace talks with Palestinians stalled since December 2008.

Mitchell returned to the region on Monday in hopes of convening indirect or "proximity" talks in the coming days between the sides after an Arab League panel approved the idea at a meeting in Cairo on Saturday.

Some Israelis see a handover of towns such as Abu Dis as a possible compromise after Prime Minister Benjamin Netanyahu said he would not curb Jewish housing construction in occupied areas in and near Jerusalem, despite U.S. calls to do so.

But Netanyahu also faces pressure from pro-settler right-wing coalition allies to avoid yielding any further control over West Bank land, particularly in the environs of Jerusalem where a majority of settlers live.

Israel captured East Jerusalem, along with the West Bank and Gaza Strip, in a 1967 war and considers all of its Jerusalem its capital. The Palestinians want East Jerusalem as the capital of the state they intend to create in the West Bank and Gaza Strip.

CONFIDENCE BUILDING

Obama had asked Netanyahu when they met in Washington last month for a list of confidence-building steps to persuade Palestinian President Mahmoud Abbas, who has demanded a total settlement freeze, to resume peace talks.

Palestinian security sources have said the United States also asked Israel to give Palestinians wider security control over some towns in occupied land, in addition to releasing prisoners and removing more roadblocks to allow freer movement.

A Palestinian official quoting police in Abu Dis, who now number a handful of unarmed men, said this week they were told they would be given greater security control later this month, when they would be permitted to carry weapons.

Under accords following a landmark 1993 interim peace deal, Israel carved up the West Bank into three zones, one where Palestinian police could be armed, another where security was a joint task with Israel, and an area in which Israeli forces remained solely in charge.

The United States has in the last few years helped train Palestinian police now in charge of most major West Bank cities as a counterbalance to Hamas Islamist rivals of Western-backed Abbas. Hamas seized control of the Gaza Strip in 2007.

But Israel has not permitted armed Palestinian forces to patrol in any West Bank town as close to Jerusalem as Abu Dis, and any Israeli agreement to do so could signal important progress was being made on a core conflict issue.

Many Palestinians regard Abu Dis, a town of 12,000, as a part of Jerusalem, as symbolised by a university there bearing the city's name, though the town is now isolated from the holy city by a cement barrier Israel built citing security reasons.