Israel's chief negotiator on Saturday went to Ramallah to hand over a letter from Prime Minister Benjamin Netanyahu to Palestinian leader Mahmud Abbas, sources on both sides said.

The letter, which covered issues relating to the moribund peace process, was in answer to a mid-April message from Abbas to Netanyahu in which he aired his grievances over the stalled negotiations.

Netanyahu's chief negotiator Yitzhak Molcho delivered the letter shortly after 9:00 pm (1800 GMT), according to a source in Abbas's office.

The letter's contents were not made public.

Delivery of the letter was confirmed by Netanyahu's office in a statement, which said: "Israel and the Palestinian Authority are committed to reaching peace and the parties agree that the exchange of letters between president Abbas and Prime Minister Netanyahu will contribute to that."

On April 17, Abbas sent Netanyahu a letter that his negotiator Nabil Shaath said was meant to challenge the Israeli leader over the collapse of the peace process and "put Mr Netanyahu on the spot."

In it, Abbas asked Israel to outline "as soon as possible" its positions on four key issues: the principle of a two-state solution based on pre-1967 lines, halting settlement activity, releasing all Palestinian prisoners and revoking all decisions that undermine bilateral agreements since 2000.

"We stand ready to immediately resume negotiations the minute we receive your positive response on these points," he wrote.

Israel has said it wants negotiations without preconditions.

In January, negotiators from both sides held five exploratory meetings in a bid to find a way to resume dialogue, but they ended inconclusively.

Previously, Netanyahu's office said that in his response to Abbas, he would offer to raise the level of contacts with the Palestinians to that of direct talks between the leaders.

Palestinian negotiator Saeb Erakat has already warned that in the absence of a favourable response from Netanyahu, Abbas would renew his campaign for UN membership for a Palestinian state in the General Assembly, in the Security Council and in all other UN bodies.

Since Abbas sent his letter, Netanyahu has struck a surprise deal with the opposition Kadima party to form a broad coalition government, with the agreement envisaging steps to renew the peace process.

Netanyahu said he hoped its establishment will encourage the Palestinians back to the negotiating table after a hiatus of more than 20 months.

"I hope Abbas will use this opportunity to resume the peace negotiations. I don't know how you advance negotiations without engaging in them," he said.

And Abbas said Israel's new government should "seize the occasion of the enlargement of the coalition to speed up the achievement of a peace deal with the Palestinian people and their leaders," his spokesman said.

But Gaza's Hamas rulers said the move would not help advance peace talks.

"The formation of the national unity Israeli government represents a grave threat to the Gaza Strip and strikes a blow to Abbas's project of negotiations," said Yusef al-Risq, political adviser to Gaza's Hamas premier Ismail Haniya.

The Palestinians have refused to restart direct talks unless Israel freezes settlement construction and agrees to a framework for discussions on borders that is based on the lines that existed before the 1967 Six-Day War.