SIRTE, Libya, Oct 8 (Reuters) - Arab states say direct peace talks between Israel and the Palestinians are not advancing and will discuss alternatives in the coming weeks, a spokesman for Palestinian President Mahmoud Abbas said on Friday.

Meeting in the Libyan town of Sirte, Arab League foreign ministers endorsed Abbas's refusal to continue the talks unless Israel extends its moratorium on Jewish settlement building in the occupied West Bank.

But they want to keep the process going for now.

The Arab follow-up committee will convene another meeting in coming few weeks to study the alternatives and the ideas that were presented by the president, Nabil Abu Rdainah told Reuters.

He did not elaborate on any alternatives aired by Abbas at the closed-door meeting.

But he denied reports there had been a recommendation to go back to indirect talks and to give Washington a one-month deadline to resolve the deadlock.

At the urging of Washington, the Arab foreign ministers were seeking ways to avert the collapse of the process launched by the White House just five weeks ago.

There are no talks at the moment because the position of the Israelis is very, very negative. They are not cooperating in the negotiations, Arab League Secretary-General Amr Moussa said earlier on Friday before hearing from Abbas.

He made clear the committee would not be telling the Palestinian president what to do next, but listening.

Abu Rdainah earlier said Abbas told U.S. Secretary of State Hillary Clinton in a telephone conversation on Thursday that Israel must fully stop settlement activities so that the peace process can succeed.

The Americans told us that they are continuing with their efforts with Israeli government. We are waiting to see the result of these efforts, he added.

NO SURPRISES

Launched in Washington on Sept. 2, the talks veered into a dead end on Sept. 26 when Netanyahu refused to extend the 10-month halt to settlement he announced last November. Abbas has said he wants to go on negotiating but cannot unless the building of new homes for Jewish settlers is frozen for three to four months more to give peace a chance.

Abbas was expected to win full Arab League backing for refusing to continue talks until Israeli Prime Minister Netanyahu extends his November 2009, 10-month moratorium on Jewish settlement-building in the occupied West Bank.

There was no comment from Israel as the sabbath closed down official business for the weekend.

The Palestinians waited nine months and more to agree to direct talks, Netanyahu said on Thursday. He said they then broke a promise, by putting forth preconditions on a total halt to settlement building right from the start.

Netanyahu has described three meetings with Abbas so far -- in Washington, the Egyptian Red Sea resort of Sharm el-Sheik, and Jerusalem -- as positive and urged continuation.

U.S. envoy George Mitchell has also sounded upbeat about the talks and prospects of a Middle East peace deal within one year, as foreseen by U.S. President Barack Obama.

Speaking on Israel Radio, vice prime minister Silvan Shalom said the Palestinians had negotiated with Israel in the past without a freeze on settlement building and could do so again if they were serious.

Palestinians regard settlement expansion as a threat to chances of a viable state on land Israel captured in a 1967 war and a sign of bad faith.

Netanyahu says it would be tragic if Abbas walked away over an issue which he says is irrelevant to the desired outcome of talks -- a pact to end 60 years of conflict and create a Palestinian state.

The United States wants the talks to continue and has been trying to find a formula to save the negotiations. Washington is seeking a 60-day extension of the freeze, diplomats said, offering Israel a variety of incentives.

Netanyahu heads a coalition dominated by pro-settler parties. Analysts say he would face a revolt if he extended the freeze without bringing all his partners on board.

In what Israel commentators saw as a possible sweetener to win over ultra-nationalist coalition partner Avigdor Lieberman, who lives in a West Bank settlement, Netanyahu this week endorsed amending Israeli law to incorporate a loyalty oath for new immigrants to the nation-state of the Jewish people.

A senior official in the prime minister's office denied the move was linked to a possible settlement moratorium extension.