Palestinian president Mahmud Abbas has agreed in principle to indirect talks with Israel under US mediation but has requested a number of guarantees, a Palestinian official said yesterday.

The latest US proposal for renewing peace talks suspended more than a year ago would have the two sides hold three months of indirect negotiations and have Israel make several goodwill gestures to the Palestinians.

The Palestinians would continue to require a complete freeze of Israeli settlements before any direct negotiations but not as a precondition to indirect talks.

"These contacts will be aimed at creating a better climate and reaching an understanding on the borders of the Palestinian state, and they will begin on February 20," the official told AFP on condition of anonymity.

"They will last three months, with the Americans negotiating directly with the two sides after determining a timetable and agreed-upon mechanisms for implementation."

The official said US Middle East envoy George Mitchell would shuttle between the two sides, either travelling between Jerusalem and the West Bank political capital of Ramallah or between separate rooms at a hotel or other location.

Under the proposal, Israel would implement a five-point initiative proposed by Mitchell that would include the freeing of Palestinian prisoners and a halt to Israeli incursions in Palestinian cities, the official said.