Israeli Prime Minister Benjamin Netanyahu is ready to negotiate a peace accord with the Palestinians on the basis of proposals from US President Barack Obama, Israeli public radio reported late Monday.

According to the radio, citing unnamed political officials, Netanyahu has agreed to resume talks to resolve the Israeli-Palestinian conflict, but with some reservations.

The Israeli leader made this decision after consulting with the head of national security, Yaakov Amidror, the radio said.

The radio also reported that Netanyahu made the point of his willingness to negotiate in a document but on condition that Israel would not return to its borders before the 1967 war and that changes in demographics since then should be taken into account.

Last May, Obama had angered Israeli leaders when in a speech he voiced support for the idea of a Palestinian state based on 1967 borders along with land swaps.

When questioned by AFP, a senior Israeli official, who requested anonymity, confirmed that "Israel is ready to be flexible regarding efforts to resume a direct dialogue with the Palestinians."

The official added that "Israel did not dismiss the American proposals aimed at establishing the future borders" of a Palestinian state.

Israeli Defence Minister Ehud Barak said on Friday in New York that the Israeli government was looking to find "a formula" which would allow for the resumption of negotiations.

The Palestinians last September left the US-sponsored talks with Israel to protest against Israel's refuse to extend a freeze on new settlements in the occupied West Bank.

The Palestinian Authority is expected to launch an initiative at the UN General Assembly in September to get international recognition for a Palestinian state.

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