UNITED NATIONS (AFP) -- The Palestinian Authority is ready to govern a nation but deadlock with Israel has made a two-state solution far from certain, the UN special envoy for the Middle East peace process said Tuesday.

Peace talks between Israel and the Palestinians have been on hold for 10 months. They broke down shortly after Washington relaunched the first direct negotiations between the two sides for nearly two years.

"The Palestinian Authority is ready to assume the responsibilities of statehood at any point in the near future," Robert Serry said in a briefing to the UN Security Council.

But he warned that without a "credible political path forward," the "viability of the Palestinian Authority and its statebuilding agenda -- and, I fear, of the two-state solution itself -- cannot be taken for granted."

He called the deadlock between the two sides "profound and persistent."

The peace talks ground to a halt in September last year when Israel's partial freeze on illegal settlement construction expired and Prime Minister Benjamin Netanyahu declined to renew it.

The Palestinians say they will not hold talks while Israel builds on land they want for a future state, while Netanyahu blames the Palestinians for the stalemate.

Serry noted that settlements were illegal under international law and insisted "settlement activity must cease."

He urged Israel "to do more to empower its moderate, committed and peaceful Palestinian partner."

The Palestinian Authority has set itself a September 2011 deadline to be ready for statehood, with the hope of pressuring Israel and the international community to recognize a Palestinian state.

President Mahmoud Abbas said Saturday that the Palestinians' bid to win UN backing for statehood was forced upon them by Israel's refusal to halt settlement building and end its occupation.

"We are going to the United Nations because we are forced to -- it is not a unilateral action," he said in Istanbul.

But Israel's ambassador to the UN, Ron Prosor, countered: "Let me state clearly -- unilateral actions will not bring peace to our region."

He added: "Like a false idol, the Palestinian initiatives at the United Nations may be superficially attractive to some. Yet, they distract from the true path to peace."

Palestinian efforts to secure UN backing for statehood could run up against US opposition.

The United States, a permanent veto-wielding member of the Security Council, could block a Council recommendation that would be needed to put the issue before the UN General Assembly in September.