"They're not frozen. We're talking," the Israeli leader said "State of the Union" programme. (Agencies)
But "it's time to talk about Palestinian concessions, too. Like recognising the Jewish state," Netanyahu said.
"You want us to recognise the Palestinian state for the Palestinian people. How about recognising the Jewish state for the Jewish people," he said.
Direct talks resumed in June after a three-year hiatus due primarily to Palestinian refusal to hold negotiations while settlement expansion continued.
Since then, Israel has announced plans to build thousands of new settler homes in the occupied West Bank – territory the Palestinians want for their future state under any peace deal.
Last week, the peace process suffered a fresh blow after the entire Palestinian negotiating team resigned in protest against continued Israeli settlement building.
A day earlier, Israel canceled plans to build 20,000 new settler homes in the West Bank, hours after their announcement sparked US and Palestinian criticism.
"They're not frozen. We're talking," the Israeli leader said "State of the Union" programme.