JERUSALEM - Israelis and Palestinians held a third round of negotiations on Tuesday, and Israel's chief representative at the talks predicted the US-brokered peace process would lead to dramatic Israeli decisions.

Tzipi Livni coupled her forecast with acknowledgement that at least one partner in Israel's right-wing coalition opposed the goal set by Washington to create a Palestinian state alongside a secure Israel.

Livni, speaking on Israel Radio before talks convened in Jerusalem, said "there will be dramatic decisions" by Israel at the end of the negotiating process. She said that in the meantime, both sides had agreed not to disclose details about their deliberations to build trust.

"We are arguing, but we are arguing inside the room," she said.

The negotiations were renewed last month in Washington after a three-year standoff over Israeli settlement expansion in the West Bank and East Jerusalem, areas captured in the 1967 Middle East war that Palestinians wants for a state along with the Gaza Strip.

A second round of talks was held at an undisclosed location in Jerusalem on August 14, despite Palestinian consternation over Israel's approval in the run-up to the meeting of plans for 3,100 new homes for settlers.

An Israeli statement issued after Tuesday's negotiations said that "both sides parted agreeing the meeting has been serious, and that they will continue the talks at a near date."

Livni and Yitzhak Molcho, a senior aide to Prime Minister Benjamin Netanyahu, represented Israel in the deliberations with Palestinian chief negotiator Saeb Erekat and Mohammed Shtayyeh, an adviser to President Mahmoud Abbas.

Israel has rejected criticism of its settlement policy, saying the new homes would be erected in enclaves it intends to keep in any future peace deal. Most countries view all settlements Israel has built on occupied land as illegal.

No details were given after last week's session that was widely believed to have focused on setting an agenda for discussing core issues such as borders, security and the future of settlements, and Jerusalem and Palestinian refugees.

"It is no secret that there is at least one party (in the Israeli government) that sees negotiations as wrong, that opposes two states for two peoples," Livni said, referring to the pro-settler Jewish Home faction.

She called on the main opposition Labour Party to "lend its support now" to the government's efforts, suggesting such political backing could help achieve a land-for-peace deal.

In a one-line response to Livni's reference to his party's opposition to a two-state solution of the Israeli-Palestinian conflict, Jewish Home's leader Naftali Bennett wrote on his Facebook page: "Get over it."