ISRAEL'S chief negotiator, Justice Minister Tzipi Livni, has hailed a "positive" mood at resumed peace talks with the Palestinians in Washington, the first in three years.
"The atmosphere was positive," she told public radio early on Tuesday Israel time after a dinner with her Palestinian counterpart, Saeb Erakat, hosted by US Secretary of State John Kerry.
"All issues are on the table, but we decided that what was said will stay in the negotiating room and will not go outside," she said.
She said the talks were resuming "not just in response to US pressure but because it's in the interest of both parties".
However, Livni recognised that disagreements within Israel's right-leaning governing coalition could pose an obstacle to any deal.
"There are ministers who don't want an agreement," she acknowledged.
Hardline ministers have openly opposed the creation of a Palestinian state and have pledged to continue building Jewish settlements on occupied Palestinian land.
Settlement building was the key issue that led to the breakdown of the last round of talks in September 2010 just weeks after they started.
Deputy interior minister Zeev Elkin, a hawkish member of Prime Minister Benjamin Netanyahu's right-wing Likud party, told public radio "any change (following a peace agreement) is not necessarily positive for Israel's security, and could make it worse.
"The Palestinians aren't ready to make the smallest concession," he charged.
Kerry welcomed the two negotiating teams and hailed the dinner as "very, very special".
"There's not very much to talk about at all," he joked, seeking to break the ice at a landmark moment that many hope may lead to a long-sought breakthrough in the deadlocked peace process.
The new US secretary of state, who has staked much of his reputation on bringing both sides back to the talks, first met with the teams separately.
He will also host a three-way meeting on Tuesday, before making a statement to reporters around 11am (0100 AEST Wednesday).
President Barack Obama has welcomed the start of the talks, calling the, a "promising step" forward but warning of "hard choices" ahead.
"The most difficult work of these negotiations is ahead, and I am hopeful that both the Israelis and Palestinians will approach these talks in good faith," he said.
Obama says the US is ready to support both sides "with the goal of achieving two states, living side by side in peace and security".
Kerry also warned that "many difficult choices lie ahead for the negotiators and for the leaders as we seek reasonable compromises on tough, complicated, emotional and symbolic issues".
"I think reasonable compromise has to be a keystone of all of this effort."
The two sides have agreed to continue talking for at least nine months, a State Department official said.
Israel and the Palestinians remain deeply divided over so-called "final status issues".
These include the fate of Jerusalem, claimed by both as a capital, the right of return for Palestinian refugees, the borders of a future Palestinian state and the fate of dozens of Jewish settlements scattered across the occupied West Bank.
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