Israel will allow 300 Palestinians living and working in Libya to enter the West Bank in the coming days, Israeli Prime Minister Benjamin Netanyahu said on Wednesday.

"Because of the current violence in Libya I received a personal request from (Palestinian) President (Mahmoud) Abbas ... that Israel allow a number of Palestinians to leave Libya and to enter the Palestinian territories ... so Israel will enable 300 Palestinians to enter the Palestinian areas," Netanyahu said.

Those Palestinians Israel will allow in had gone to Libya from former homes in Jordan, Syria and Lebanon, a Palestinian official said, effectively classifying them as refugees or descendents of refugees who flew or were forced to leave their homes during the 1948 war that led to Israel's creation.

Hussein al-Sheikh, head of civil affairs for the Palestinian Authority said those coming from Libya would travel into the West Bank via Jordan.

Netanyahu, who was speaking alongside visiting Polish Prime Minister Donald Tusk, said the move was made as a humanitarian gesture because the Palestinians were under threat and because there was a "concern for their safety and their very lives".

The official Palestinian news agency said Abbas had "welcomed Israel's decision, has expressed his appreciation and considers it as a step in the right direction."

Palestinian officials estimate that there are more than 30,000 Palestinians living and working in Libya. Abbas has asked Netanyahu to allow in more.

Netanyahu said Israel's move was "a mark of our desire for good neighbourliness and ... peace".

Israeli-Palestinian peace talks brokered by the United States have ground to a complete halt after the Palestinians refused to return to the negotiating table unless Israel extended a moratorium on its settlement building on Palestinian land.

In a parliamentary speech earlier, Netanyahu told lawmakers the current regional instability in the Middle East "could last many, many years".

The Palestinian refugees issue is one of the major issues that would require resolution in any future Israeli-Palestinian peace deal.

Palestinians have long demanded that refugees should be allowed to return, along with millions of their descendants. Israel says any resettlement must occur outside of its borders.

Palestinian negotiators have signaled they would accept "a just and agreed-upon" solution for refugees as laid out in a U.N. resolution that mentions compensation for those who settle elsewhere.