US Secretary of State John Kerry's efforts have led to an agreement in principle to resume Israeli-Palestinian peace talks but the devil remains in the details of the negotiating terms.

"I am pleased to announce that 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 Amman late Friday.

The two sides are to meet in Washington within "the next week or so" to nail down the terms for peace talks.

"After he moved mountains to renew talks, Kerry has now reached the truly tough part," said the diplomatic correspondent of Israel's Haaretz newspaper.

"The lack of trust between the sides is still strong and the gap between (Israeli Prime Minister Benjamin) Netanyahu and (Palestinian leader Mahmud) Abbas is still cavernous. Kerry will attempt to construct a bridge over the abyss but let's hope he does not plunge down into oblivion."

The Palestinian presidency said it looked forward to "an agreement on the basis of a resumption of talks," while stressing there were still "specific details that need to be resolved".

However, Palestinian factions, embittered by the experience of the 1993 Oslo peace accords, were openly critical.

Independent MP Mustafa Barghuti rejected any return to the negotiating table without a clear reference to the borders which existed before the 1967 Middle East war and a halt to all Jewish settlement building

He said any such talks would be a waste of time and nothing more than a time-wasting exercise serving Netanyahu's government.

"The experience of 20 years of negotiations has been enough to prove it was a mistake to sign the Oslo accords before a halt to settlement building. The number of settlers on occupied (Palestinian) land has since shot up from 150,000 to 600,000 now," his movement said.

It warned against "falling into the trap of Oslo".

The Palestinian Front for the Liberation of Palestine, a leftist faction within the PLO umbrella, said a return to peace talks outside the framework of the United Nations and its resolutions on the Israeli-Palestinian conflict would amount to "political suicide".

It urged the Palestinian leadership to resume its campaign to join international organisations, suspended at the request of Washington, especially judicial bodies which could put pressure on Israel "instead of submitting Palestinian rights that are guaranteed under international law to compromises and useless bets which have failed time and again".

Palestinian political analyst Hani al-Masri was blunt in his assessment.

"Kerry's attempts are destined to fail because Israel does not want to commit to references in any negotiating process, so it does not commit to anything," he told AFP.

"Accepting a return to negotiations today for the Palestinian leadership would be tantamount to political suicide and will not change the circumstances for which it has refused to do so previously."

According to Haaretz, "Netanyahu agreed to a series of gestures toward the Palestinians in the coming months, including the release of hundreds of prisoners. Over the past four months he has likewise restrained, relatively speaking, West Bank settlement construction, a slowdown which will hold as long as negotiations are on."

But "a big question mark remains around Netanyahu's intentions", the paper said.

"Is he interested only in a peace process or is he determined to reach a peace accord? If it is only a process he is after, he will have earned himself several months of quiet until the bluff is called.

"But if he is in it for the real thing, he will have to for the first time present clear stances and explain where for him Israel ends and Palestine begins."

A Palestinian official said: "The ball is now in Israel's court. Kerry has proposed the bases for a resumption of negotiations and asked Netanyahu to respond favourably to one of them.

"The bases are the release of Palestinians jailed before the Oslo accords, minors, the sick or the elderly," he said on condition of anonymity. "And that Israel recognise the 1967 (border) lines as a reference point, or a halt to settlement building."

The Palestinian official said the Israeli premier had agreed to hold a special cabinet session to draw up Israel's response to Kerry's proposals.

"If Israel accepts them, negotiations will resume."