UN leader Ban Ki-moon said he will seek "goodwill gestures" by Israel to help revive peace talks when he sees Prime Minister Benjamin Netanyahu on Wednesday in Jerusalem.

He indicated the concessions could include the sensitive issue of Israeli settlement in the occupied territories, which the Palestinian leadership has insisted must end before they return to direct talks frozen for the past 16 months.

Ban will hold talks with Israel's President Shimon Peres and Netanyahu before moving on to Ramallah to meet Palestinian president Mahmud Abbas.

The United Nations is part of the diplomatic Quartet on the Middle East -- along with the United States, European Union and Russia -- which has been seeking to bring the two sides back to the negotiating table.

Ban said in an interview with a small group of reporters, including AFP, in Amman late Tuesday that he expects "a gesture of goodwill by both sides".

But it would be "more important for the Israelis to show such a gesture of goodwill to create the favourable atmosphere" so Abbas can justify staying in talks to his people, the UN leader said.

The settlements would definitely be raised in talks and Ban said they could be the target of one of the "gestures" sought. Ban said he would urge Abbas to return to dialogue.

Ban reaffirmed the UN stance that Israel's construction in the occupied territories is illegal. The settler housing "really hampers" reconciliation and "many Palestinian people have been really suffering from this."

The UN leader vowed to raise the sensitive topic with Netanyahu. "There should be no suprise from the Israeli side," he declared, adding that the settlements "may be one of those gestures of goodwill."

"I am going to urge Prime Minister Netanyahu to show some political will, courage and vision so that this long overdue vision of two states, where Israelis and Palestinians can live side by side in peace and security, can be realised."

The Palestinians pulled out of direct talks with Israel in September 2010 when Israel refused to extend a moratorium on settlement construction.

The European Union and United States have also been pressing for a return to full talks in recent weeks. EU foreign affairs representative Catherine Ashton saw Netanyahu and Abbas last week.

Tony Blair, the special representative of the diplomatic Quartet on the Middle East, has been working on a package of measures to put to Israel and the Palestinians.

Ban met Blair on Tuesday night in Amman after talks with King Abdullah II and Jordan's prime minister and foreign minister about the country's efforts to revive the peace talks.

Jordan has hosted five sets of preliminary contacts this month on reviving full negotiations, but no breakthrough has been announced.

Adding to the heightened diplomatic frenzy, Hamas chief Khaled Meshaal has been in Jordan this week on his first official visit since his expulsion in 1999.

Meshaal also met King Abdullah amid Israeli and Arab media reports that he could soon stand down as leader of the radical group which rules Gaza.