The US said it remained "mindful" of the Palestinian position on an end to settlement construction, a State Department spokesman said Monday.

US State Department spokesman Philip Crowley told reporters that Israel's temporary moratorium, which expires three weeks after talks launch, would be up for discussion when leaders meet on 2 September.

"We’re very mindful of the importance the issue is within the negotiation. That’s why we want to get in the negotiation. None of these issues can be resolved outside of this negotiation," Crowley said.

The spokesman said he was not concerned, however, that Israel has not committed to extend that moratorium, despite calls from the Palestinian Authority. Negotiations officials made it clear on Saturday that if new settlement projects were announced for the West Bank, including East Jerusalem - where the moratorium did not apply - that talks would be halted.

Chief PLO negotiator Saeb Erekat said Palestinians would not continue negotiating with Israel if it fails to extend the freeze beyond its 26 September deadline, calling on Israel to renew the slowdown and add East Jerusalem to its mandate.

Crowley said once direct talks began, the US expected "both parties will do everything within their power to create an environment for those negotiations to continue constructively."

In Egypt, PA Commissioner for foreign relations Nabil Sha'ath said officials backed the Palestinian stance on the issue of illegal settlements, saying following a meeting with Egyptian Foreign Minister Ahmed Abul Gheit in Cairo on Monday, that parties agreed that negotiations cannot be used as a cover for settlement expansion.

PLO officials have threatened to pull out of talks if settlement construction continues.

The PLO and Israel endorsed direct talks with Israel on Friday after receiving the US invitation. The Palestinian Authority then announced its participation on Monday following a cabinet meeting.

US Secretary of State Hilary Clinton said that talks would not be entered on on preconditions, despite Palestinian warnings that settlements could derail talks.