Prime Minister Benjamin Netanyahu said Tuesday Israel would consider "certain" measures to help Palestinian football after Palestinian officials asked for the Israeli association to be thrown out of world governing body FIFA.
FIFA president Sepp Blatter, who is on a visit to Israel and the Palestinian territories, said "a match for peace" would take place between the two sides in the wake of the spat.
Blatter said Netanyahu would attend the game.
"Yes he said that, that if a game will be played between Palestine and Israel and we organise it in Zurich he will be there and he said he would shake hands with everybody," said the 79-year-old Swiss.
"We would be happy, FIFA in Zurich, to accept the organisation of such a competition."
For his part on the wider issue of Palestinian football Netanyahu said "we will discuss a certain number of measures that could improve the situation (of Palestinian football)", without providing details.
Blatter said he was passing a message on from Netanyahu to the Palestinian football chiefs and it would be up to them how they responded.
"We are here in the King David (Hotel) and I feel I am a little bit in Camp David," said Blatter referring to the country retreat of American presidents and where down the years, largely away from the glare of the cameras, the likes of Jimmy Carter and Bill Clinton have hosted peace talks between various parties.
"Israel football shall help the football of Palestine.
"I have obtained a message and I will present this message to the (Palestinian) football association.
"What they do with this message it is then up to them but I will, and I will try until the FIFA congress is open - in exactly 10 days - that we can avoid such a situation," added Blatter, who has said the issue is his 'challenge number one'.
Israel Football Association chief Rotem Kamer earlier Tuesday condemned a Palestinian attempt to oust his country from FIFA as "cynical" and counter to the spirit of sport.
Kamer said the Palestinian demand had "nothing to do with sports".
"We see it as a clear mix of politics and football, something which should not find a place in the FIFA Congress," he told reporters.
"We believe football in our region should be used as a bridge between people".
Palestine, which has been a member of FIFA since 1998, wants the world body to bar Israel from international competition to punish restrictions it places on the movement of Palestinian players.
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It also opposes the participation in the Israeli league of five clubs located in Jewish settlements in the occupied West Bank.
The motion will need a three-quarters majority to be passed at the FIFA Congress in Zurich.
Kamer stressed the IFA has "helped the PFA (Palestine Football Association) in any way it could."
He said regulating the movement of Palestinian players "is not something that is in our hands," and it was security concerns that prevented the entry of a small number of players into Israel.
"I don't see any other football associations in the world telling their governments how to deal with security issues," he said.
The Palestinians are also basing their request for Israel's expulsion on the "racism" against Arabs of some Israeli clubs.
Kamer acknowledged a problem existed but said it was not unique to Israel. He said the authorities had taken harsh steps against Beitar Jerusalem, which has notoriously ultra-nationalist fans.
"Our national teams are combined with Arabs and Jews, we have joint leagues, joint clubs," he said.
- Football 'politicised' -
Netanyahu criticised the "politicisation" of football, which he said "could cause the deterioration of a remarkable institution".
PFA head Jibril Rajoub rejected Kamer's criticism, saying the demand to expel Israel was "nothing related to politics".
"The suspension of Israel is not our target, our target is to help the Palestinian athletes to move," Rajoub told reporters in Ramallah, speaking in English.
Rajoub said he had met with former Israeli president Shimon Peres on the matter "six times" but they failed to resolve the issue.
"We (will) never accept a compromise. There is no deal outside of FIFA," he said.
Blatter said last week that a successful vote on the Palestinian motion would be a "dangerous" precedent that could get FIFA involved in other political and diplomatic battles.