Prime Minister Benjamin Netanyahu on Tuesday ruled out any deal with the Palestinians unless they recognise Israel as the Jewish state and give up their refugees' right of return.

"I will not bring a deal that doesn't cancel the (refugees') 'right of return' and doesn't include Palestinian recognition of the Jewish state," Netanyahu's spokesman Ofir Gendelman said on his official Twitter feed.

Netanyahu's remarks, made in an address to the ruling rightwing Likud-Beitenu faction, touched on one of the most thorny aspects of the peace talks with the Palestinians and one which looks likely to derail US efforts to extend the negotiations beyond a looming April deadline.

The Palestinians have systematically refused Netanyahu's demand that they recognise Israel as the Jewish state, saying it would deny their historical narrative and effectively cancel out the right of their refugees to return to homes that they fled from or were forced out of during the 1948 war which accompanied Israel's creation.