Israel and Palestine could be ready to re-launch peace talks after a stalemate that has lasted almost three years, US Secretary of State John Kerry has said.

Speaking on Friday after days of meetings with both Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas, Kerry said the groundwork had been laid for the resumption of talks.

"We have reached an agreement that establishes a basis for resuming direct final status negotiations between the Palestinians and the Israelis," he told reporters in Jordan.

"The agreement is still in the process of being formalised."

Al Jazeera's Rosiland Jordan, reporting from Washington, said the fact Kerry had two meetings with Abbas, the second of which was not expected to take place, could indicate a change in policy had been agreed.

"Kerry was very keen to try to get this back to the top of the agenda because there's an understanding that without some kind of peace deal so many other tensions may not be resolved satisfactorily," our correspondent said.

"There's been concern about the number of settlements being built in the Occupied West Bank and a growing sense of dread that the prospect of a two state solution was slipping away.

"It could be said that, if nothing else, Kerry has made a full throated effort to try to keep the two state solution alive."

Israel to release prisoners

The US has previously tried to navigate peace talks between the two nations when Hillary Clinton was Secretary of State.

The talks fell apart within weeks and Israel's settlement process re-started.

Meanwhile, Israeli Minister Yuval Steinitz has said that his country would release a "limited" number of Palestinian prisoners.

"There will be a limited release of [Palestinian] prisoners," Steinitz, the minister in charge of international relations and strategic affairs, told public radio on Saturday without giving numbers.

He said some of those to be freed have been in Israeli jails for up to 30 years.