Palestinians say there must be a total halt to Israeli settlement building
Chief Palestinian negotiator Saeb Erekat has played down hopes of a resumption of peace talks with Israel.
He said negotiations could not continue while Israeli settlement building continued in occupied territories.
He was speaking after US Secretary of State Hillary Clinton urged both sides to resume peace talks as soon as possible and without preconditions.
She said other questions should be dealt with before the settlement issue. Israel has yet to respond to her move.
The Israeli government has refused Palestinian demands for a complete halt to settlement building in the West Bank and East Jerusalem, which it occupied during the 1967 Israeli-Arab war.
WEST BANK SETTLEMENTS
Construction of settlements began in 1967, shortly after the Middle East War
Some 280,000 Israelis now live in the 121 officially-recognised settlements in the West Bank
A further 190,000 Israelis live in settlements in Palestinian East Jerusalem
The largest West Bank settlement is Maale Adumim, where more than 30,000 people were living in 2005
There are a further 102 unauthorised outposts in the West Bank which are not officially recognised by Israel
The population of West Bank settlements has been growing at a rate of 5-6% since 2001
Source: Peace Now
But it has limited building work for 10 months in the West Bank, excluding East Jerusalem.
Mr Erekat told the Associated Press news agency: "You cannot have discussions on borders while the territory you want to set up your state on is being eaten up by the settlements."
He said the Palestinians were waiting for the arrival in the region later this month of US special envoy George Mitchell.
Mrs Clinton said on Friday that first agreeing the borders of a future Palestinian state would deal with Palestinian concerns about settlement building.
"Resolving borders resolves settlements; resolving Jerusalem resolves settlements," she said.
Her comments came after talks with Jordan's Foreign Minister Nasser Judeh.
Mrs Clinton also met Egypt's Foreign Minister Ahmad Abulgheith in Washington.
Meanwhile, the Israeli prime minister held talks in Egypt, and the Saudi foreign minister was in Syria.
With her remarks, Mrs Clinton launched round two of the Obama's administration's push for peace in the Middle East, says BBC state department correspondent Kim Ghattas.
Last year, all the parties got bogged down in the details of an Israeli settlement freeze and the US was unable to break the deadlock, our correspondent says.
This time the end game remains the same, she says, but the starting point seems to have changed - Washington is now pushing the parties to go straight to talks about borders.