France is ready to host a Middle East peace conference before the end of July to help relaunch stalled negotiations, French Foreign Minister Alain Juppe said on Thursday.

Speaking in Ramallah, Juppe described the current stalemate between Israel and the Palestinians as "untenable," and said France was willing to transform a July meeting of international donors into a broader peace conference.

"We would be prepared, on the basis of a request by the (Mideast) Quartet, to organise in Paris..., before the end of July, a conference that would not be simply for the donors but a broader political conference involving the negotiation process," he said.

Palestinian prime minister Salam Fayyad, speaking to journalists alongside Juppe, welcomed the possibility of a peace conference.

"We were the ones who wanted the Paris conference to have a political dimension," he said.

Juppe is holding meetings with Israeli and Palestinian officials during a three-day trip, at a time that talks between the two sides are deadlocked over the issue of Jewish settlement construction.

In the absence of negotiations, the Palestinians have pledged to seek recognition and membership at the United Nations in September, a move criticised by Israel and the United States.

France has called for the urgent resumption of negotiations, which came to a halt shortly after they began in September 2010 when a partial freeze on Israeli settlement construction expired.

Israel refused to renew the freeze and the Palestinians insist they will not hold talks while settlements are being built on land they want for their future state.

"We are convinced that if nothing happens here by September, the situation will be very difficult for the whole world when the United Nations General Assembly meets," Juppe said.

"We must get back around the negotiating table. Only negotiations will allow us to envisage an effective and lasting solution for peace," he added.

Juppe proposed parameters along the lines of those laid out by US President Barack Obama in a speech last month, suggesting new talks proceed in two stages.

The first, Juppe said, would discuss security and borders, based on the 1967 lines, with the assumption that a final accord would include mutually-agreed land swaps.

The second stage of the talks, which he said should be completed within a year from its start, would discuss Jerusalem and Palestinian refugees.

France has expressed frustration with the stalled talks, and has hinted that it may recognise a Palestinian state if negotiations do not resume soon.

It has also welcomed a reconciliation deal between rival Palestinian movements Hamas and Fatah, despite Israel's rejection of the agreement.

Juppe said Paris considered the accord, signed last month in Cairo, to be "good news.

"Anything that can bring together the Palestinian people together will move things in a positive direction on the condition that it is clear that negotiations aim, for both sides and both parties, for the creation of two states for two people," he said.

Juppe arrived in Israel on Wednesday evening, shortly after meeting with Palestinian president Mahmud Abbas in Rome, and held talks in Jerusalem with his Israeli counterpart Avigdor Lieberman.

On Wednesday morning, he met with Palestinian youth activists in the West Bank before heading to Jerusalem for discussions with Israeli Prime Minister Benjamin Netanyahu.

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