The invitation was delivered by Mitchell when he met Abbas on Friday. Erekat said the exact date of the talks is yet to be determined.

The two leaders were expected to discuss efforts to revive peace talks suspended since Israel launched a devastating assault on Gaza in December 2008. Washington has not yet officially announced the invitation and a US official declined to comment on whether Israeli Prime Minister Benjamin Netanyahu would also be invited.

Briefing the Israeli Cabinet on his meetings with Mitchell, Netanyahu said it would soon become clear whether peace talks would get under way. In a statement summing up his visit, Mitchell said he held "positive and productive talks" with Israeli and Palestinian leaders in an effort "to improve the atmosphere for peace and for proceeding with proximity talks,” a reference to indirect, US-mediated negotiations.

The United States has been pressing the two sides to return to negotiations for months, but the Palestinians have refused to do so without a complete freeze on Israeli settlement construction in the occupied West Bank, including annexed Arab East Jerusalem.

Netanyahu has given no ground publicly over US and Palestinian calls to halt the construction of homes for Jews on occupied territory, an issue that has opened a rift between Israel and the United States.

Palestinian sources said Mitchell proposed a compromise in which the Palestinians would begin indirect talks in return for an unwritten commitment by Washington to assign blame publicly to any party that took action compromising the negotiations.

The formula appeared to envisage a situation in which Israel would quietly delay implementing some housing projects in and around East Jerusalem, without declaring a freeze that could anger pro-settler parties in Netanyahu's governing coalition.

The Al-Quds newspaper reported Sunday that three Israeli bulldozers started groundwork for the construction of houses for the Ramat Shlomo settlement on Palestinian land in the East Jerusalem neighborhoods of Beit Hanina, Shu'fat and Lifta. "Three Israeli companies are working under the protection of Israeli border police to complete building of the separation wall near the three neighborhoods," the paper added.

In another development, Prime Minister Salam Fayyad gave the go-ahead on Sunday for local elections in the West Bank in July, despite opposition from Hamas, which governs the Gaza Strip.

"The Cabinet decided to continue with all necessary preparations for carrying out the polls for local councils in the West Bank on July 17," the Fayyad government said in a statement.

— With input from agencies