Israel's prime minister has increased the amount of occupied territory he wants to keep after any peace deal with the Palestinians, state media reported on Thursday, a move that could complicate US-backed efforts to reach an accord.

Benjamin Netanyahu's spokesman declined to comment on the report he had added a bloc of Israeli-settled land near the Palestinian governmental seat in the occupied West Bank to a list of enclaves Israel intends to retain.

That would leave 13 percent of the West Bank in Israeli hands, Israel's Army Radio said, a prospect likely to dismay Palestinians who want the area for a future state. There was no immediate comment from Palestinian President Mahmoud Abbas.

Netanyahu had also departed from past peace blueprints that had envisaged an equal trade of land inside Israel for any West Bank areas it retained.

Instead, Netanyahu has offered to buy some of the settlement land from the Palestinians, but they had rejected such a deal, the radio station said.

The station attributed its information to an anonymous source familiar with the details of five-month-old Israel-Palestinian peace talks.

According to the report, Netanyahu told US Secretary of State John Kerry that Israel intends to hold on to the Beit El settlement enclave in addition to the Etzion, Maale Adumim and Ariel blocs it has long said it would keep.

Beit El, north of Jerusalem, is next to the Palestinian city of Ramallah, where the Palestinian Authority run by Mahmoud Abbas is headquartered.

The future of settlements is a core issue in the decades-old Israeli-Palestinian conflict.

Israel, in tandem with the release of dozens of Palestinian prisoners as part of the current negotiations, has stoked Palestinian anger by announcing new housing construction plans in areas it has said will remain in its hands.

Palestinians seek a state in the West Bank and Gaza Strip with East Jerusalem as its capital. Israel captured those areas in the 1967 war and pulled its troops out of the Gaza Strip, now run by Hamas Islamists opposed to the peace talks, in 2005.

More than 500,000 Israeli settlers live among 2.4 million Palestinians in the West Bank and East Jerusalem. Most countries consider the settlements illegal and Palestinians fear the enclaves will deny them a viable and contiguous state.

Reuters