CAIRO, March 3 (Reuters) - Arab League ministers on Wednesday backed a US call for indirect Palestinian-Israeli talks, giving a boost to Washington's efforts to revive the moribund peace process.

Palestinian President Mahmoud Abbas had said he would adhere to the decision of the Arab League committee that met in Cairo.

Israeli Prime Minister Benjamin Netanyahu, who has called for direct talks but has not ruled out indirect negotiations as a first step, said after the Arab League move that conditions were improving for the start of so-called proximity talks.

We will see. We are not the obstacle. I've said it takes two tango in the Middle East. But it might take three, and initially, we might need a shuttle mission, he told Israel's parliament, referring to a mediator moving between the sides.

The world understands -- and how -- that this government wants negotiations and has taken steps, not simple ones, to promote talks, Netanyahu said, an apparent reference to a partial settlement freeze that Abbas has termed inadequate.

Syria, a staunch opponent of Israel, said the Arab League decision was not agreed by consensus and it appeared aimed at giving political cover for a Palestinian decision already taken.

Despite not being convinced about the sincerity of the Israeli side to achieve a just peace, the committee sees ... indirect negotiations as a last initiative, Arab League chief Amr Moussa told a meeting of Arab foreign ministers in Cairo.

These negotiations should not be open-ended and must have a time limit not exceeding four months. The indirect talks should not be automatically translated into direct talks, he said.

Palestinian negotiator Saeb Erekat had also said Arabs were not convinced by Israeli intentions but backed the US idea.

Palestinians have played down the significance of indirect talks, saying US Middle East peace envoy George Mitchell's shuttle diplomacy over the past year has been merely that.


'NO CONSENSUS'

Erekat said if discussions failed the committee would meet in July to assess developments. Moussa said any failure would prompt Arabs to seek an emergency UN Security Council meeting.

Washington has been trying for a year to get Palestinians and Israelis to talk. Abbas broke off talks with Israel to protest its offensive in Gaza launched in December 2008.

He has resisted US and Israeli calls for a resumption of direct negotiations, saying Israel must first halt all Jewish settlement building on occupied lands where the Palestinians aim to establish a state.

Palestinian officials have cited recent Israeli measures, including a plan to include West Bank religious sites in a Jewish heritage project and plans for more East Jerusalem homes, as evidence that Netanyahu is not sincere about peacemaking.

Announcement of the heritage plan last week has increased tension in the West Bank. It touched off violent protests and triggered calls for a new Palestinian uprising from Hamas Islamists who control the Gaza Strip and are hostile to Israel.

Netanyahu has said the plan to renovate holy sites, including two in the West Bank revered by Muslims and Jews, would not impinge on Muslim freedom of worship.

Overnight, Israeli forces raided a Palestinian village near Jenin in the northern West Bank, wounding two members of the Islamic Jihad group, a Palestinian security officer said.

Islamic Jihad said the two men, leaders wanted by Israel for eight years, had fought gun battles through the night with the Israeli forces. They had been wounded and detained, it said.