Palestinians responded coolly on Wednesday to calls by U.S. President Barack Obama and Prime Minister Benjamin Netanyahu to move from indirect to direct peace negotiations.

Chief Palestinian negotiator Saeb Erekat blamed Netanyahu for blocking the way to direct negotiations, because of his refusal to meet Palestinian demands for a full freeze on Israeli construction in the West Bank and East Jerusalem.

Asked if he expected more U.S. pressure on the Palestinians in the wake of Tuesday's meeting between Obama and Netanyahu, Erekat said: "The whole world and the U.S. administration knows that the one who is blocking the door to direct negotiations is Netanyahu."

"We are sincerely interested in starting direct negotiations, but Netanyahu keeps closing the door in front of us," Erekat told Voice of Palestine Radio. "Netanyahu must decide if he wants peace or settlements. He cannot have both."

He also reiterated that the Palestinians first want to see progress in indirect talks on the issues of borders and security, and for direct negotiations to resume from where they ended in December 2008, during an election campaign in Israel that saw Netanyahu return to power.

"The world knows that starting direct talks is in the hands of Netanyahu. All he has to do is say that all settlement activities, even those in Jerusalem, will stop," Erekat, a top aide to Palestinian President Mahmoud Abbas, said.

"We have had a peace process for 19 years, but the Israeli settlement policy has not changed," he added.

Indirect talks initiated in May by U.S. mediator George Mitchell are about halfway through their agreed four-month lifetime. They are to conclude in September, around the same time as a partial freeze that Netanyahu ordered last November on Israeli settlement building on West Bank land.

Israel said it is prepared to take additional steps to ease Palestinian movement in the West Bank in a bid to coax Abbas into direct peace talks, Netanyahu said on Wednesday.

Netanyahu, however, sidestepped questions in an interview on ABC's "Good Morning America" about whether he was prepared to extend beyond September a 10-month moratorium on new construction in West Bank settlements.

One day after a fence-mending meeting with Obama at the White House, Netanyahu repeated a call for a restart of peace talks with Abbas.

Palestinians have reacted cautiously to Netanyahu's promise of "concrete steps" within weeks to persuade them to hold direct talks.

Netanyahu said he was prepared to take steps including "additional easing of movements" and some economic projects.

"The point is, we are prepared to do them. But what we want to see finally is one thing: We want President Abbas to grasp my hand ... to shake it, sit down and negotiate a final settlement of peace between Israel and the Palestinians," he said.

Netanyahu was scheduled to meet UN Secretary-General Ban Ki-moon and address U.S. Jewish leaders in New York on Wednesday.

Meanwhile, Sami Abu Zuhri, Hamas' spokesman in Gaza, said his Islamist organization "refutes Obama's call for direct negotiations," which he said would only serve as a "cover up" for continuing the occupation. He also charged that Obama's and Netanyahu's statements again showed "there is no hope for change in U.S. foreign policy."

He additionally rejected Obama's praise of Israeli steps to ease its economic blockade of Gaza, saying "we want the siege to be completely lifted."

Tuesday's White House meeting - Netanyahu's first since a chilly reception in March - revived heated differences within his largely hardline cabinet on whether Israel should extend its partial moratorium on Israeli construction in the West Bank.

Ministers of the left-to-center Labor Party support an extension, while hawks in Netanyahu's nationalist Likud and in other right-wing and ultra-right coalition parties oppose it.

The moratorium, which excludes Jewish neighborhoods built in annexed East Jerusalem, is due to expire on September 26.

Ultra-right Foreign Minister Avigdor Lieberman insisted Wednesday that Israel has not made "any promises" to Obama regarding an extension of the settlement moratorium and that the issue had not been the main one on the agenda.

"We must ensure that normal life continues [in the settlements] for those who were sent there by all the governments of Israel," Lieberman, who himself lives in a settlement near Jerusalem, told Israel Radio.

Defense Minister Ehud Barak of the Labor Party insisted, however, that there was more to the White House meeting than published. He said Netanyahu had shown Obama that he was serious and prepared to act regarding the peace process. That was the reason for the Labour Party to stay in the coalition, he said.

Barak has been criticized internally for serving as a "fig leaf" in Netanyahu's otherwise right-wing coalition, despite the absence of a meaningful peace process.

Direct talks with the previous Israeli government of Ehud Olmert collapsed when Israel bombed the Gaza Strip 18 months ago to suppress rocket fire from Palestinian Islamists headed by the Hamas movement, which rejects a peace treaty with Israel.

In his Cairo speech 13 months ago, Obama said: "The U.S. does not accept the legitimacy of continued Israeli settlements. This construction violates previous agreements and undermines efforts to achieve peace. It is time for these settlements to stop."

U.S. pressure restarted the process in 2009. But Abbas was politically embarrassed when Obama later retreated on his call for a total settlement freeze.

A report this week by the Israeli human rights group B'Tselem says more than 300,000 Israelis now live on 42 percent of the West Bank land where the Palestinians want to establish their future country in a "two-state solution" with Israel.