Israel has handed the Palestinians a proposal aimed at extending peace talks beyond an April 29 deadline, as efforts to salvage the negotiations came to a head.
The fate of the US-brokered peace process could be decided within days, Israeli Prime Minister Benjamin Netanyahu said earlier, warning that "either the matter will be resolved or it will blow up".
Netanyahu's remarks to ministers from his rightwing Likud party came as US officials were working around the clock to prevent a collapse of the negotiations over a dispute about Palestinian prisoners.
"In any case, there won't be any deal without Israel knowing clearly what it will get in exchange," Netanyahu said.
According to a Palestinian official, Israel presented Palestinian president Mahmud Abbas with a draft agreement to push forward with the talks. Abbas was to examine the proposal during the night, he said.
An Israeli official would not provide details on the proposal but told AFP: "Now the Palestinians need to reply if they are willing to continue negotiations."
With the talks teetering on the brink of collapse, Washington has been fighting an uphill battle to coax the two sides into accepting a framework proposal that would extend negotiations beyond April 29.
But the issue has become tied up with the fate of 26 veteran Palestinian prisoners whom Israel was to have freed this weekend under the original terms agreed to relaunch talks.
Israel on Friday informed the Palestinians it would not free the prisoners, with the US State Department confirming it was working "intensively" to resolve the dispute.
US officials said Secretary of State John Kerry, in Paris Sunday, spoke with Netanyahu and later told reporters in the French capital that it was not yet appropriate for the US to make any public judgement about the situation "at this important moment".
"It's really a question between the Palestinians and the Israelis, and what Prime Minister Netanyahu is prepared to do," he added.
US State Department sources did not rule out the possibility that Kerry could fly from France to the Middle East if necessary on Monday.
Kerry himself said "we'll see where we are tomorrow (Monday) when some judgements have to be made."
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- 'Critical week' -
Israel's Defence Minister Moshe Yaalon said: "This is a critical week for the Israeli-Palestinian issue", noting Kerry's efforts and the "commitment and contribution of President (Barack) Obama towards this endeavour".
Yaalon, who made the remarks during a meeting with chairman of the US Joint Chiefs of Staff General Martin Dempsey, had recently criticised Washington's foreign policy and reportedly called Kerry's peacemaking efforts "obsessive" and "messianic".
The Palestinians say they will not even consider extending the talks without the prisoners being freed, but Israel has refused to release them without a Palestinian commitment to continue the talks, prompting a fresh crisis of confidence.
"We agreed to the fourth batch," Intelligence Minister Yuval Steinitz told reporters on Sunday, while stressing it would not happen as long as Abbas was preparing to "blow up the negotiations" the very next day.
President Shimon Peres, in Austria, said the sides were "working around the clock in an effort to reach a breakthrough in the talks."
"I hope that in the coming days there will be positive developments in the negotiations," he said.
"The ball is now in Israel’s court," Palestinian prisoners minister Issa Qaraqaa told Voice of Palestine radio, saying the leadership was expecting an answer from the Israeli government within 24 hours.
Aside from the release of the 26 veteran detainees, Abbas reportedly wants an Israeli commitment to free more prisoners as one of his conditions for agreeing to extend the talks.
An Israeli official told AFP on Saturday that Israel was willing to free the prisoners but the Palestinians were "creating difficulties".
Under the deal that relaunched peace talks, Israel agreed to release 104 prisoners held since before the 1993 Oslo peace accords in exchange for the Palestinians freezing all efforts to seek further international recognition.
So far, Israel has freed 78 of them in three batches, and the last group -- which the Palestinians insist includes 14 Arab Israelis jailed for nationalist attacks -- was to have been released on March 29.