Jerusalem, July 21: Renewing negotiations with the Palestinians is "vital" for Israel, Prime Minister Benjamin Netanyahu said Sunday, after both sides agreed to lay the groundwork to resume talks frozen for three years. 

"The resumption of the peace process is a vital strategic interest of the state of Israel," he said in a statement. 

"It is important on its own to try to bring an end to the conflict between us and the Palestinians, and is important because of the challenges facing us, especially from Iran and Syria," he said. 

Netanyahu's remarks were his first reaction to the last night statement by US Secretary of State John Kerry, who said Israeli and Palestinian negotiators had agreed to meet to pave the way for a resumption of direct peace talks. The last round of direct talks broke down in 2010 over the issue of Israeli settlement building in the West Bank and east Jerusalem. 

Netanyahu also stated the two central goals he perceived for the talks: "Preventing a bi-national state... That would endanger the future of the Jewish state, and preventing the establishment of another Iranian-sponsored terrorist state within our borders." He did not provide further details on what the sides had agreed upon ahead of the initial rounds of talks. 

"I will insist on Israel's security demands and its vital interests," Netanyahu's statement said. Speaking on privately-owned Channel 2 television, Israeli Justice Minister and chief peace negotiator Tzipi Livni noted that while there were no preconditions to talks, "everything will be on the table". 

This would include the 1967 borders and east Jerusalem, which the Palestinians want as their future capital. Earlier Saturday, Intelligence Minister Yuval Steinitz said Israel would release a "limited" number of Palestinian prisoners as a "gesture". 

He said the staged release would be of a "limited number" of prisoners, some of whom he defined as "heavyweights", who have been in jail for periods of up to 30 years. According to Israeli rights group B'Tselem, at least 4,713 Palestinians are imprisoned in the Jewish state. Their release is one of the Palestinians' key demands for resuming peace talks, particularly the 107 prisoners arrested prior to 1993, when the Oslo peace accords were signed.