Talks have been stalled since September due to PA preconditions for a halt to all Israeli construction in Judea, Samaria, and eastern Jerusalem, and the release of all PA security prisoners in Israeli jails.
PA chairman Mahmoud Abbas agreed to reconcile with the rival Hamas militant group and pledged to ask the UN forrecognition of PA statehood in September.
But with both efforts now in trouble, PA officials say they are willing to 'tolerate' limited settlement construction if Israel accepts a recent peace plan floated by President Barack Obama.
Abbas had said Monday he would forgo a September declaration of state at the UN if the United States could provide a better suggestion.
"I don't know if the US has another option, but if it does, we will not go to the UN," Abbas told Lebanese television station LBC.
Abbas' suddenly malleable stand comes after the US congress introduced a non-binding resolution to cut funds to the PA if unilateral moves are pursued at the UN in September.
Previously, senior PA officials had said Abbas was 'trapped with September,'but had no easy way out of the position he had created for himself.