UNITED NATIONS, Jan 10 (Louis Charbonneau/Reuters) - The Palestinian UN envoy said on Monday that his and other UN delegations have yet to persuade Washington to support a Security Council push to condemn Israeli settlement work, but they will keep trying.

Riyad Mansour, the permanent Palestinian observer to the United Nations, said that an initial draft resolution that condemns and calls for a halt to all West Bank settlements was delivered to the 15-nation UN Security Council in December.

We are in touch with the Americans, Mansour told Reuters. All members of the Security Council are in touch with the Americans, and even leaders at a higher level, from our side, from the Europeans, and from others.

Our objective is to convince our American colleagues that there is value to having this resolution adopted in the Security Council regarding settlements, he said. We are not there yet.

He said it was possible that the draft resolution, which was the brainchild of more than a dozen countries, could be finalized this week for a vote as early as next week.

Intensive US diplomatic efforts to revive direct peace talks between Palestinian President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu collapsed last year after Israel refused to extend a 10-month partial settlement freeze.

Israel has repeatedly called for a resumption of direct negotiations with the Palestinians. But the Palestinians have refused to return to the negotiating table until Israel first agrees to halt settlement work.

RESUMPTION OF DIRECT TALKS

The United States could use its veto power on the Security Council to block any attempt to condemn Israeli settlement activity, as it did with similar initiatives in the past. Some diplomats said that if Washington made clear it would veto the resolution, the Palestinians might not put the text to a vote.

Council diplomats said there was broad support on the council for the Palestinian draft though it remained unclear what Israel's staunch ally Washington would do.

They say Israel's decision last year to end its settlement freeze clearly frustrated the U.S. government, though it was unclear if that meant President Barack Obama's administration would support a council move to censure the Jewish state.

Mansour said the goal of the resolution was positive -- to create the conditions for direct talks with Israel by removing what he said was the main hindrance to their resumption.

The purpose of this resolution, among other things, is to try to remove this obstacle from the path of the peace process so we can go back to negotiation in an atmosphere that is conducive to increasing the chances for success, he said.

We are interested in peace, he said. We are interested in the resumption of negotiations.

Mansour also said his delegation would continue to push for recognition of a Palestinian state.

Earlier on Monday UN Secretary-General Ban Ki-moon said that he deplores Israel's demolition of the Shepherd Hotel in East Jerusalem as part of a settlement project, warning that it only heightened tensions between Israel and the Palestinians, U.N. spokesman Martin Nesirky said.

Ban's remarks echoed earlier criticism from U.S. Secretary of State Hillary Clinton, who called the Israeli action a disturbing development. Israeli Prime Minister Benjamin Netanyahu defended the settlement project, saying Jews have a right to live anywhere in Jerusalem. (Editing by Philip Barbara)