Palestinian President Mahmoud Abbas on Thursday called on Israel to stop Jewish settlement construction in order to resume peace talks.

In a meeting with visiting Croatian Prime Minister Jadranka Kosor, Abbas added that he was hopeful that "the independent Palestinian statehood with its capital in East Jerusalem would be created "very soon."

The peace talks have stalled since September due to a dispute on the resumption of Jewish settlement construction in the West Bank.

Meanwhile, Palestinian Prime Minister Salam Fayyad announced the formation of a joint economic council with Croatia.

"The council aims at supporting economic cooperation between the Palestinian National Authority and Croatia," Fayyad said in a statement after meeting Kosor.

Fayyad and Kosor also agreed to increase Croatian aid to the Palestinians and boost cooperation in healthcare, including sending Palestinian patients for treatment in Croatian hospitals.