The entire Palestinian negotiating team has resigned due to what they say is continued Israeli settlement building and frustrations over the lack of progress in US-brokered peace talks.

Mohamed Shtayyeh, a Palestinian negotiator, said President Mahmoud Abbas had yet to accept the team's resignation.

Israel is "completely responsible for the failure of negotiations, because of the continuation and escalation of settlement-building", Shtayyeh told AFP news agency.

In an interview with Egypt's CBC television, Abbas said negotiations towards a peace agreement with Israel would continue even without the current negotiating team.

"Either we can convince it to return, and we're trying with them, or we form a new delegation," Abbas said.

Another negotiator, speaking to AFP on condition of anonymity, confirmed the Palestinian resignations.

"Abbas has a number of choices here - he can refuse or accept and form a new delegation, or demand a new negotiations mechanism," he said, referring to the potential to go back to indirect talks through a US team.

Direct talks between Israeli and Palestinian negotiators began in July, but have been plagued by problems and have made little headway.

Palestinians say Israeli settlements impede efforts to create a viable, Palestinian state in the occupied West Bank and Gaza Strip, with East Jerusalem as its capital.

Benjamin Netanyahu, Israeli prime minister, announced earlier this week that he would reassess plans to build 24,000 new settlement homes.

The move came amid Israeli lobbying efforts to stop a nuclear deal between world powers and Iran.