Palestinian leader Mahmoud Abbas on Thursday dismissed Israel's temporary freeze on settlement building as bringing "nothing new" to the long-stalled Middle East peace process.

"It brings nothing new. Settlement activity will continue in the West Bank and Jerusalem," Abbas said, after Israeli Prime Minister Benjamin Netanyahu announced 10-month restrictions on construction in the occupied West Bank.

Netanyahu "had a choice between peace and settlements, and unfortunately, he chose the settlements," Abbas said on a visit to Santiago.

In a joint declaration with Chilean President Michelle Bachelet, Abbas reaffirmed on Wednesday "the pressing need for Israel to cease illegal settlements in the Palestinian territories."

The Palestinian Authority, which rules the West Bank, but not the Gaza Strip –controlled by the Islamist movement Hamas since it ousted forces loyal to Abbas in June 2007—is ready to renew talks with Israel based on a two-state solution if it does, the Palestinian leader said.

Peace talks have been on hold for nearly a year and remain stalled over Israel's refusal to halt settlement construction.

"Israel has a historic occasion to take the initiative today, not tomorrow," Abbas said in Arabic in comments translated into Spanish by an interpreter, adding, "If we get peace, we will have peace for the entire region and perhaps for the entire world."

Netanyahu's move on Wednesday was praised by the United States as a step toward relaunching the peace process, but the Palestinians said it fell far short of their demand for a complete settlement freeze ahead of any new negotiations.

-AFP/NOW Lebanon