Israeli Foreign Minister Avigdor Lieberman on Wednesday denounced Palestinian president Mahmud Abbas as the "greatest obstacle to peace" and said his resignation would be a "blessing."

It was the second time in two days that the ultra-nationalist minister has attacked Abbas, sparking a furious denunciation by his Palestinian counterpart, Riyad al-Malki, who accused him of "incitement to murder."

"Abu Mazen's resignation would be a blessing because he represents the greatest obstacle to peace," Lieberman told Israel's army radio, using Abbas's nom-de-guerre.

"He has decided to sacrifice the interests of the Palestinians for his own benefit, to defend his place in history," said Lieberman, referring to Abbas's attempts to secure UN membership for the state of Palestine.

His remarks were made just hours before the Quartet was to hold separate talks with Israeli and Palestinian officials in the latest international bid to revive direct Israeli-Palestinian negotiations which broke down in autumn 2010.

But Lieberman said Abbas was not a viable partner for peace and was instead working to undermine Israel internationally.

"Abu Mazen is not reliable, he is not a man of peace, he is working against Israel on the international stage," Lieberman said, accusing him of pushing "to try Israeli officials before international courts."

But Palestinian foreign minister Riyad al-Malki denounced Lieberman's remarks as "incitement to murder" and urged the the Quartet "to seriously deal with these declarations and call for a collective and international decision to boycott Lieberman, until he publicly apologises."

He also demanded that the Israeli government "condemn, denounce and take action" against the minister for his remarks.

"Lieberman, a settler known for his racist and aggressive attitudes, is the last person to talk about peace and coexistence," he said.

Two days ago, Lieberman said it would be "better" for Israel if Abbas was replaced, in remarks denounced by the European Union as "not helpful" and slammed by a spokesman for UN Middle East envoy Richard Serry as "inflammatory."

Following Lieberman's outburst, President Shimon Peres on Tuesday rushed to defend his Palestinian counterpart, describing him and his prime minister Salam Fayyad as "serious leaders that want peace and are working to prevent violence and extremism in our region."

"We must continue to negotiate peace with them in order to achieve full peace that will end this long conflict," his office said.

The Quartet last month called on Israel and the Palestinians to resume peace talks immediately, in a statement issued just hours after Abbas submitted the membership request to the UN on September 23.