"Major powers" are at work outlining the basis for direct peace talks between Israeli and Palestinian negotiators, EU foreign policy chief Catherine Ashton indicated, a Thursday night Reuters report said.

In a letter seen by the British news wire in the wake of a new Palestinian proposal for direct talks, Ashton wrote that a statement would be issued early next week and talks could begin within the month.

Ashton appeared to be referring to the major powers involved in the Middle East Quartet, a body established by the EU, US, UN and Russia to continue toward Mideast peace with a unified approach. The body advises its partner nations on developments, and works quietly in the region to secure rights for Palestinians and push forward diplomatic processes.

On Tuesday, President Mahmoud Abbas told reporters in Ramallah that he presented a new formula for direct peace talks to US envoy George Mitchell. The formula used a March statement from the Quartet as the basis for talks, and asked that representatives from the United States take part in the planning of the discussions and development of clear goals and timelines.

The March Quartet statement said talks should proceed for a period of 24 months, with the aim of establishing a Palestinian state on the pre-1967 borders under the goal of ending the Israeli occupation of the West Bank, East Jerusalem and Gaza.

On Wednesday, Israeli Prime Minister Benjamin Netanyahu rejected the formula, saying the Israeli public would never accept it.

Washington, however, said it had not yet dismissed the suggestion.

According to Reuters, Ashton's letter said the forthcoming Quartet initiative "should help President Abbas rally enough support, both at home and abroad, to engage in direct talks."

The Reuters report said Ashton's letter made clear that the upcoming Quartet statement would back the old terms, and would be "issued concurrently with the announcement of the launch of direct talks."