Israeli and Palestinian leaders agreed to a series of direct talks on Thursday, seeking to forge the framework for a US-backed peace deal within a year and end a conflict that has boiled for six decades.

US Secretary of State Hillary Clinton, who hosted the first session of talks between Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas, expressed confidence that this effort could succeed where so many others have failed.   

President Barack Obama, aiming to resolve one of the world's most intractable disputes, has set a goal of striking a deal within 12 months to create an independent Palestinian state that exists peacefully, side-by-side with the Jewish state.

"This will not be easy," Netanyahu said. "A true peace, a lasting peace, would be achieved only with mutual and painful concessions from both sides."    

Despite widespread skepticism about the chances of this latest attempt to bring peace to the region and the shooting of Jewish settlers by Hamas militants in the West Bank this week, Netanyahu and Abbas agreed to meet again on Sept 14-15 with Clinton also present.   

Diplomats said that meeting will take place in Egypt, which with Jordan is a key Arab backer of the current peace push.

The two sides agreed to meet every two weeks thereafter, US Middle East peace envoy George Mitchell said. The agreement to continue talks marked a small step forward, although a dispute over Jewish settlements on occupied West Bank land could halt progress in its tracks.

"We are convinced that if you move forward in good faith and do not waver in your commitment to succeed on behalf of your people, we can resolve all of the core issues within one year," Clinton told Netanyahu and Abbas as the talks began.

"You have the opportunity to end this conflict and the decades of enmity between your peoples once and for all."  

The two leaders, who appeared to be developing some rapport, shook hands after the formal start of the talks in an ornate State Department reception room, marking the resumption of direct dialogue that last broke off in 2008. Both Netanyahu and Abbas have said they want a "two-state solution."

But both are hobbled by domestic political challenges, putting prospects for a final deal in question.   

Abbas again called on Israel to end the blockade of the Gaza Strip and stop settlement activity. But he also said the Palestinians recognised the need for security, a key Israeli demand amplified by this week's shootings in the West Bank.   

"We want to state our commitment to follow on all our ...engagements, including security and ending incitement," Abbas said.

The hardline Palestinian Islamist group Hamas, which rules the Gaza Strip, rejected the peace talks and said it would keep attacking Israelis. Four Israelis were killed and two injured in two separate attacks in the occupied West Bank this week.   

A spokesman for Hamas, which controls the Gaza Strip, said some 13 militant groups had joined forces to launch "more effective attacks" against Israel. Asked if this included suicide bombings, he said: "All options are open."    

Jewish settler groups, meanwhile, vowed to push ahead with new construction in occupied areas of the West Bank, underscoring a central sticking point that threatens to derail the negotiations just weeks after they begin. - Reuters