Extremists will gain the upper hand unless Israeli-Palestinian negotiations are revived, Middle East envoy Tony Blair said on Thursday, warning that time was running out to get the peace process moving.

Talks brokered by Washington collapsed last year when Israeli Prime Minister Benjamin Netanyahu refused to extend a moratorium on new building in Jewish settlements in the occupied West Bank.

Netanyahu told U.S. President Barack Obama last week that his vision of how to achieve Middle East peace was unrealistic, exposing a divide that could doom any U.S. bid to restart the talks.

Blair, the representative of the quartet of Middle East peace brokers -- the United States, Russia, the European Union and the United Nations -- said there was no alternative to reviving negotiations.

"The absolute essence is to try and revive a credible process in which we've put the two-state solution up there with a chance of achieving it," the former British prime minister said, speaking at an event in London.

If this did not happen, moderates would end up being disempowered and "people on the extremes...will get traction on the political situation. That's the risk of what is happening at the moment."

"If we don't...stand up now and move this (peace process) forward, we are going to find, not within years, but possibly within months, that this situation becomes incapable of getting the traction for peace that we desire," he said.

AGREED PRINCIPLES

Last week, Obama embraced a goal long sought by the Palestinians -- that the state they seek in the occupied West Bank and Gaza Strip should largely be drawn along lines that existed before the 1967 war in which Israel captured those territories and East Jerusalem.

But he also said demographic changes needed to be taken into account -- a reference to Jewish settlements in occupied territory -- and criticised the accord between the Palestinian Fatah and Hamas factions as an obstacle to peace.

Netanyahu said Israel was willing to make compromises for peace but insisted Israel would never pull back to its 1967 borders, saying those borders were "indefensible".

Blair said Obama and Netanyahu's prescriptions would both take account of realities on the ground and were not as different as they seemed.

"At a certain point they may be simply different ways of expressing the same thing," he said.

On the revolts sweeping the Arab world, Blair called for support to be given to modernising, democratic groups that backed the protests to avoid well-organised Islamist groups taking advantage of the upheaval.

"What we need in the region as a whole is a plan that gets behind those modern and democratic elements and that tries to ... neutralise those elements that would subvert those uprisings and carry them into a different form of oppression or dictatorship," he said