PM Netanyahu & President Obama
PM Netanyahu & President Obama Flash 90

U.S. President Barack Obama on Thursday urged Prime Minister Binyamin Netanyahu to resume negotiations with the Palestinian Authority "as soon as possible," the White House said in a statement quoted by AFP.

The two leaders spoke by telephone as Secretary of State John Kerry made his latest trip to the region as part of marathon efforts to re-launch the stalled peace talks.

"The president encouraged Prime Minister Netanyahu to continue to work with Secretary Kerry to resume negotiations with the Palestinians as soon as possible," the White House said in the statement.

The White House added that the two leaders also discussed "recent developments in Egypt, Iran and Syria," without providing further details.

"The leaders affirmed the importance of continued close coordination between the United States and Israel on a range of security issues," it said.

Earlier on Thursday, PA Chairman Mahmoud Abbas’s Fatah party effectively torpedoed Kerry's plan for restarting negotiations.

Fatah officials demanded that changes be made to Kerry's Middle East peace plan, following a meeting in Ramallah. The move means it is likely the PA will also reject the plan.

Abbas has insisted that Israel recognize the 1949 Armistice Line as a designated border for any future PA state. Israel refuses, as the pre-1967 borders are indefensible and withdrawing back to these borders would guarantee its destruction.

He has also demanded that Israel release terrorists jailed before the 1993 Oslo Accords and that it freeze all Jewish construction in Judea, Samaria and eastern Jerusalem. PA officials said that Kerry's plan was rejected because it did not guarantee that Israel would freeze construction, nor did it guarantee that the talks would be based on the 1949 Armistice Line.

Netanyahu's office denied on Thursday that Israel had agreed to accept the 1949 armistice lines as the basis for renewed negotiations with the Palestinian Authority. Israeli officials had been quoted in earlier press reports as confirming the claim made by a top PA official.

While denying the part about the 1949 armistice lines, Netanyahu's office did not issue a denial of the building freeze claim.

Officials in Jewish communities in Judea and Samaria said that even if Netanyahu's office did issue a denial, it would be meaningless, as the government could in any case impose a “soft” building freeze, in which it just drags its feet on approving building plans and the like, as opposed to an official freeze.

Meanwhile, Bayit Yehudi Chairman and Economy Minister, Naftali Bennett, made clear that his party will not be a partner in a government that holds diplomatic negotiations based on the idea of returning to Israel's pre-1967 borders.

"The Bayit Yehudi party, which I head, will not be a partner, even for one second, in a government that agrees to negotiate based on [pre-]'67 lines,” he stated. “Our capital, Jerusalem, is not up for negotiations and will never be up for negotiations.”