Kerry Israel Palestine
Chief Palestinian negotiator Saeb Erekat (L-R), U.S. Secretary of State John Kerry and Israel's Justice Minister Tzipi Livni shake hands at a news conference at the end of talks at the State Department in Washington Reuters

Israel's chief negotiator and Justice Minister Tzipi Livni has spoke of her frustration with members of the Israeli government who are resisting efforts to find peace with Palestinians.

"There are people in the government who don't want peace," said Livni in an interview with Israel website Ynet.

She spoke of a hardline group in Benjamin Netanyahu's cabinet, the pro-settler "Jewish Home" party - which is headed by Economy Minister Naftali Bennett - and Housing Minister Uri Ariel specifically, and their attempts to dismantle peace talks.

The Israeli coalition government includes politicians who are vehemently opposed to the creation of a Palestinian state. Bennett has threatened to pull the party out of the coalition if negotiations with Palestinians include the release of Arab prisoners.

"Bennett and Uri Ariel represent those who want to prevent a peace process," said Livni.

"I believe we are close enough that decisions on both sides will be made, with American encouragement, to continue the talks," she continued.

Despite Livni's optimism of a deal being struck between the two parties, settlement expansion has continued, Israel has refused to release a fourth batch of prisoners and Palestinian Authority President Mahmoud Abbas has registered with 15 UN agencies against Israeli wishes.

Israeli Foreign Minister Avigdor Lieberman has claimed that Abbas' move is responsible for the fracturing of the peace talks.

"We were very close to an agreement with the Palestinians, a complex transaction which was being examined by the [Israeli] cabinet, but at the last moment the Palestinians broke their promises and submitted applications" to join the international treaties, Lieberman said.

"We are ready to discuss and negotiate but we will not accept unilateral steps," he added.

Israel has frozen Palestinian taxes it collects in retaliation for Abbas' UN action. It remains unclear how much is being withheld but the $110 million collected every month represents two-thirds of the Palestinian Authority's income that pays workers' wages.