Abbas and Netanyahu Meet in the White House (Photo Courtesy The White House)

The statement comes as the United States tries to broker direct peace talks between the Israelis and Palestinians.  The talks began in September, but derailed after a few weeks when Israel's temporary moratorium on building in East Jerusalem and the West Bank expired.

The settlement issue has become the primary roadblock to the parties even talking about peace.

Palestinian Authority leader Mahmoud Abbas told reporters on Sunday that "if Israel wants to return to its settlement activities, then we can't go on. A settlement freeze must include all of the Palestinian territories and above all Jerusalem."

Netanyahu is expected to propose a 90-day settlement freeze to the Knesset -- at the intense pressure of the United States -- but the freeze would exclude Jerusalem.

Abbas has indicated that the Palestinians would not accept such an exclusion.

President Obama has been fighting to keep his administration's brokered direct talks between the Israelis and the Palestinians alive, but both sides are indicating that the talks might break down over the settlement issue.

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