Palestinian authorities Monday rejected an offer by Israel to reinstitute the settlement freeze in the West Bank in exchange for recognition of Israel as a Jewish state and a resumption of the direct talks between the two being brokered by the United States.

Israeli Prime Minister Benjamin Netanyahu announced in a speech Monday that he would be willing to halt the settlement construction if Palestinian leadership would acknowledge that "it recognizes Israel as the nation-state of the Jewish people." 

Arab-Israelis make up 20 percent of the population of Israel.

Palestinian leaders countered that they already recognized the state of Israel, and that the settlements were the real issue holding up the direct peace talks that the Obama administration initiated in September.

Those direct talks have been paused since a settlement freeze expired on September 26 and construction of Israeli housing in the West Bank resumed.

Palestinian authorities and the Arab League asked the Americans to negotiate a halt to the construction within a month over the weekend so that both parties could return to the negotiating table. 

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