(Reuters) - Israel and the Palestinian Authority issued a rare joint statement on Saturday, saying they were committed to peace after Prime Minister Benjamin Netanyahu dispatched an envoy to meet Palestinian President Mahmoud Abbas.

The envoy carried a letter from Netanyahu replying to one he received last month from Abbas, in which the Palestinian leader stated his grievances over the collapse of peace talks in 2010 and laid out his parameters for a resumption of negotiations.

Details of Netanyahu´s letter were not released, but Israeli officials said last week that they did not expect him to accept a key Palestinian demand to halt all settlement building in the occupied territories before reopening any talks.

Netanyahu´s office issued a joint statement with the Palestinians after envoy Isaac Molcho met Abbas in Ramallah -- the Palestinian Authority´s administrative capital.

"Israel and the Palestinian Authority are committed to achieving peace and the sides hope that the exchange of letters between President Abbas and Prime Minister Netanyahu will further this goal," the statement said.

Abbas´s letter had demanded a halt to Israeli settlement construction on West Bank land captured in the 1967 Middle East war and accused Israel of showing a lack of commitment to the decades-old peace process, officials said.

Netanyahu has repeatedly called on Abbas to return to talks without any pre-conditions and promised that Israel was ready to make concessions, if the Palestinians would also compromise.

FLICKER OF HOPE

Few diplomats expect any breakthrough ahead of U.S. presidential elections in November, however the surprise formation of a national unity government in Israel last week has provided a slight flicker of hope.

Netanyahu stunned the political establishment on May 8 by hooking up with the main opposition group, the centrist Kadima party, to form one of the biggest coalitions in Israeli history.

The head of Kadima, Shaul Mofaz, has long blamed Netanyahu for the failure of the peace talks and told reporters last week that entering new negotiations "was an iron condition for forming the unity government".

The Palestine Liberation Organization´s executive committee is set to convene on Sunday to review Netanyahu´s letter.

"Tomorrow (Sunday) the PLO executive committee will meet to discuss what Netanyahu said in his letter and what steps we are going to take," the PLO´s Wasel Abu Yusef told Reuters.

Before Abbas met Molcho, he received a call from U.S. Secretary of State Hillary Clinton to discuss regional issues, Abbas´s office said. Clinton also spoke to Netanyahu mid-week to urge a resumption in negotiations.

U.S.-sponsored peace talks froze in 2010 after Netanyahu rejected Palestinian demands that he extend a partial settlement construction freeze he had introduced at Washington´s behest.

About 500,000 Israeli settlers and 2.5 million Palestinians live in the West Bank and East Jerusalem -- territory the Palestinians want for an independent state.

The settlements are considered illegal by the International Court of Justice, the highest U.N. legal body for disputes. Israel cites historical and Biblical links to the land and says the status of settlements should only be decided in peace talks. (Writing by Ori Lewis; editing by Crispian Balmer) (© Thomson Reuters 2012. 05/12/12)