Prime Minister Benjamin Netanyahu has said Palestinian leaders are "poisoning the future" and are to blame for the continued Israeli-Palestinian conflict.

Addressing the UN General Assembly, Mr Netanyahu said Israel is prepared to revive peace talks, but rejected a freeze on Israeli settlement building, saying the issue has "always been about the existence of a Jewish state".

"I am ready to negotiate all final status issues, but one thing I will never negotiate is our right to the one and only Jewish state", the prime minister said.

Mr Netanyahu has previously rejected the 1967 borders as the basis for talks and denounced what he called Palestinian incitement.

The Israeli–Palestinian conflict intensifies Show all 10 1 /10 The Israeli–Palestinian conflict intensifies The Israeli–Palestinian conflict intensifies Medics evacuate a wounded man from the scene of an attack in Jerusalem. A Palestinian rammed a vehicle into a bus stop then got out and started stabbing people before he was shot dead AP The Israeli–Palestinian conflict intensifies Israeli ZAKA emergency response members carry the body of an Israeli at the scene of a shooting attack in Jerusalem. A pair of Palestinian men boarded a bus in Jerusalem and began shooting and stabbing passengers, while another assailant rammed a car into a bus station before stabbing bystanders, in near-simultaneous attacks that escalated a month long wave of violence AP The Israeli–Palestinian conflict intensifies Youths attend the funeral of Ahmad Sharake who was shot during clashes with Israeli forces in Jelazun refugee camp, near Ramallah, West Bank. Tensions in the area continue to run high following a series of stabbing attacks that have occurred around Israel in clashes between Palestinian youths and Israeli security forces Getty Images The Israeli–Palestinian conflict intensifies Palestinians throw molotov cocktail during clashes with Israeli troops near Ramallah, West Bank. Recent days have seen a series of stabbing attacks in Israel and the West Bank that have wounded several Israelis AP The Israeli–Palestinian conflict intensifies Women cry during the funeral of Palestinian teenager Ahmad Sharaka, 13, who was shot dead by Israeli forces during clashes at a checkpoint near Ramallah, at the family house in the Palestinian West Bank refugee camp of Jalazoun, Ramallah AP The Israeli–Palestinian conflict intensifies A wounded Palestinian boy and his father hold hands at a hospital after their house was brought down by an Israeli air strike in Gaza Reuters The Israeli–Palestinian conflict intensifies Palestinians look on after a protester is shot by Israelis soldiers during clashes at the Howara checkpoint near the West Bank city of Nablus EPA The Israeli–Palestinian conflict intensifies A lawyer wearing his official robes kicks a tear gas canister back toward Israeli soldiers during a demonstration by scores of Palestinian lawyers called for by the Palestinian Bar Association in solidarity with protesters at the Al-Aqsa mosque compound in Jerusalem's Old City, near Ramallah, West Bank AP The Israeli–Palestinian conflict intensifies Undercover Israeli soldiers detain a Palestinian in Ramallah Reuters The Israeli–Palestinian conflict intensifies Palestinian youth burn tyres during clashes with Israeli soldiers close to the Jewish settlement of Bet El, in the West Bank city of Ramallah, after Israel barred Palestinians from Jerusalem's Old City as tensions mounted following attacks that killed two Israelis and wounded a child

Speaking to the UN General Assembly before Mr Netanyahu, Palestinian President Mahmoud Abbas criticised Israel's "abhorrent" settlement policy and demanded the UN take a bigger role in the effort to resolve the Israeli-Palestinian conflict.

Mr Abbas urged the 193-member General Assembly to declare 2017 "the international year to end the Israeli occupation of our land and our people".

He insisted "our hand remains outstretched for making peace," but said Israel refuses to "abandon the mentality of hegemony, expansionism and colonisation."

President of Palestine Mahmoud Abbas during his address to the General Debate of the 71st Session of the United Nations General Assembly at UN headquarters in New York, 22 September, 2016 (EPA)

In his speech against Palestinian incitement, Mr Netanyahu said: "Now here's the tragedy, because, see, the Palestinians are not only trapped in the past, their leaders are poisoning the future."

He asked the audience to imagine a day in the life of a 13-year-old Palestinian boy named Ali.

"Ali wakes up before school, he goes to practice with a soccer team named after Dalal Mughrabi, a Palestinian terrorist responsible for the murder of a busload of 37 Israelis. At school, Ali attends an event sponsored by the Palestinian Ministry of Education honouring Baha Alyan, who last year murdered three Israeli civilians. On his walk home, Ali looks up at a towering statue erected just a few weeks ago by the Palestinian Authority to honor Abu Sukar, who detonated a bomb in the center of Jerusalem, killing 15 Israelis.

"When Ali gets home, he turns on the TV and sees an interview with a senior Palestinian official, Jibril Rajoub, who says that if he had a nuclear bomb, he'd detonate it over Israel that very day. Ali then turns on the radio and he hears President Abbas's adviser, Sultan Abu al-Einein, urging Palestinians, here's a quote, "to slit the throats of Israelis wherever you find them." Ali checks his Facebook and he sees a recent post by President Abbas's Fatah Party calling the massacre of 11 Israeli athletes at the Munich Olympics a "heroic act". On YouTube, Ali watches a clip of President Abbas himself saying, "We welcome every drop of blood spilled in Jerusalem." Direct quote.

"Over dinner, Ali asks his mother what would happen if he killed a Jew and went to an Israeli prison? Here's what she tells him. She tells him he'd be paid thousands of dollars each month by the Palestinian Authority. In fact, she tells him, the more Jews he would kill, the more money he'd get. Oh, and when he gets out of prison, Ali would be guaranteed a job with the Palestinian Authority.

"Ladies and Gentlemen,

"All this is real. It happens every day, all the time. Sadly, Ali represents hundreds of thousands of Palestinian children who are indoctrinated with hate every moment, every hour."

Israeli army escorts Palestinian children to school

Mr Netanyahu also extended an invitation to Mr Abbas urging him to address Israel's parliament, which the Palestinian Ambassador to the UN rejected as a "new gimmick".

"Will he attend the International Conference proposed by France and supported by many to be held by the end of the year?" Riyad Mansour said in a statement to The Associated Press.