Ramallah: Palestinian president Mahmoud Abbas is to meet US envoy George Mitchell Wednesday to discuss final status issues in indirect peace talks with Israel, the chief Palestinian negotiator said.

Mitchell will then meet with Israeli Prime Minister Benjamin Netanyahu on Thursday, an Israeli official said on condition of anonymity.

"The discussions between Abbas and Mitchell on Wednesday will concern final-status issues with Israel," head Palestinian negotiator Saeb Erekat said, referring to core disputes in the decades-old conflict such as Jerusalem and Palestinian refugees.

"For now we will focus on the issues of borders and security in order to demarcate two states along the 1967 border," he added.

He warned however that continued Israeli colony activity, including in occupied east Jerusalem, could scupper the talks.

"The Israeli side has just two options, either peace or the continuation of the [colonies]. Israel cannot have both at the same time," he said.

US officials have said Mitchell is expected in the region this week but they have not yet said when he would arrive or released details about his schedule.

Mitchell left the region a week ago after convincing Israel and the Palestinians to launch an initial round of US-mediated "proximity talks."

The indirect negotiations were first agreed on in March but the initiative collapsed within days.