RAMALLAH, West Bank – U.S. Secretary of State John Kerry is closing in on an agreement between Israel and the Palestinians to relaunch peace talks for a period of six to nine months, Palestinian officials said Thursday.

While a deal is not yet in place, the Palestinians said their president, Mahmoud Abbas, is pleased with the progress and hopeful a formula can be reached to begin what would be the first substantive peace negotiations in nearly five years. Kerry announced this week that he had significantly narrowed the gaps between the sides and would soon return to the region to try to wrap up the deal.

Since taking office early this year, Kerry has been shuttling between the sides in search of a formula for resuming negotiations.

The Palestinians hope to establish an independent state in the West Bank, east Jerusalem and Gaza Strip, territories captured by Israel in the 1967 Mideast war. The last round of talks broke down in late 2008.

The Palestinians have demanded that Israel stop building Jewish settlements in the West Bank and east Jerusalem before negotiations begin. They see the continued construction of settlements, home to more than 500,000 Israelis, as a sign of bad faith that makes it increasingly impossible to partition the land. Israel withdrew from Gaza in 2005.

The Palestinians also want Israel to commit to base its final border with a future Palestinian on its 1967 frontiers. Israeli Prime Minister Benjamin Netanyahu says negotiations should begin without any preconditions.

Two Palestinian officials familiar with the negotiations said that Kerry has floated a compromise in which Israel would freeze settlement construction outside of major “blocs” that Israel expects to keep. These blocs are mostly located along Israel’s pre-1967 border.