RAMALLAH, West Bank, May 13 (Reuters/Ali Sawafta) - The formal response of Israeli Prime Minister Benjamin Netanyahu to Palestinian grievances over frozen peace negotiations contains nothing that could revive the talks, Palestinian officials said on Sunday.

Netanyahu's reply on Saturday to a letter he received last month from Mahmoud Abbas rejected the Palestinian president's demand to halt Jewish settlement building in occupied territories and repeated a call for an unconditional return to talks that collapsed in 2010, according to the officials.

The content of (Netanyahu's) letter did not represent grounds for returning to negotiations, Hanan Ashrawi, a member of the Executive Committee of the Palestine Liberation Organization which reviewed the document, told Reuters.

Israel did not release details of Netanyahu's letter, which a senior aide carried to Abbas in the West Bank city of Ramallah. But Israeli officials said last week they did not expect Netanyahu to agree to Abbas's demand to stop settlement construction before reopening any talks.

After the right-wing Israeli premier's letter was delivered, his office issued a joint statement with the Palestinians saying both sides were committed to achieving peace.

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

BROAD COALITION

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.

Yasser Abed Rabbo, who also belongs to the Palestinian Executive Committee, said the Israeli letter did not include clear answers about the central issues which are undermining the resumption of the peace process.

Abed Rabbo cited the issues of settlements and Israel's refusal to accept Palestinian demands for the creation of a Palestinian state, with minor territorial swaps, along the lines that existed before it captured the West Bank in a 1967 war.

Netanyahu has called those lines indefensible and said the future borders and the fate of settlements should be discussed in negotiations and not serve as preconditions for talks.

Speaking at a news conference, Abbed Rabbo said the Executive Committee, which is chaired by Abbas and serves as the PLO's highest decision-making body, urged the Quartet of Middle East peace sponsors to intervene and get peace efforts back on track.

The Quartet consists of the United States, the European Union, the United Nations and Russia.

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

The U.S.-sponsored peace talks unraveled 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 rejects that position and cites historical and biblical links to the West Bank and Jerusalem.

(Editing by Jeffrey Heller, additional reporting by Nidal al-Mughrabi in Gaza)