Israel announced Wednesday that it is easing some restrictions on the impoverished Gaza Strip and West Bank as it negotiates a final peace deal with the Palestinians.

Israeli minister of international relations Yuval Steinitz revealed that 5,000 new work permits were being issued for Palestinians to work in Israel, the opening hours of the key Allenby Bridge crossing would be extended, and new imports of some building materials would be allowed into Gaza.

"We have an interest in a strong, viable, prosperous Palestinian economy," Steinitz told reporters after a meeting on the sidelines of the United Nations General Assembly.

"A better economic climate might help to create a better political climate," he added.

"And a strong Palestinian economy is good for Israel, it's good for our economy, it's good for the general atmosphere."

He was speaking after ministers from the Middle East Ad Hoc Liaison committee met for some three hours to discuss progress in the talks so far.

US Secretary of State John Kerry said Washington was planning to step up efforts to help reach an elusive Middle East peace deal, having set an ambitious goal of sealing an agreement within nine months.

He revealed for the first time that Israeli and Palestinian negotiators have now met directly seven times since the peace talks were relaunched in late July aiming to create two states, one Israeli and one Palestinian, living side-by-side.

"All of the issues are on the table, territories, security, refugees, Jerusalem, all of the final status issues are on the table," Kerry stressed.

US special envoy Martin Indyk, a former ambassador to Israel who was appointed in July to shepherd the negotiations, has taken part in some of the seven rounds of talks so far.

"We've agreed now in the last week ... to intensify these talks and we've agreed that the American participation should be increased somewhat in order to try to facilitate them," Kerry added, without elaborating.

Steinitz revealed that the Allenby Bridge, a border checkpoint near the West Bank town of Jericho which is the only point of access to Jordan for Arab residents and businesses in the West Bank, would soon be operating five days a week round-the-clock.

Israel has implemented the delivery of an extra 4 million cubic meters of water a year into the West Bank and was about to do the same with five million cubic meters into Gaza in the coming weeks.

"We have facilitated the import of building materials into the Gaza Strip," Steinitz added, saying the first phase of allowing cellular equipment into Gaza would also happen in the next few weeks.

Palestinian Finance Minister Shukri Bishara said he was "really encouraged by some of the initiatives" announced by Israel at Wednesday's meeting.

"Opening the bridge for extended hours, is immense," he said, adding that he personally crossed through the borderpoint every week.

"Enlarging the list of imports into Gaza is of immense help," Bishara said. "I hope we can build on these preliminary moves and multiply them. It's in our best interests to be prosperous, your (Israel's) best interests to see us prosperous."

UN chief Ban Ki-moon earlier called on all donors to step up efforts to help the slowing Palestinian economy saying "the situation is volatile and the status quo is not sustainable. In the long term it is damaging to both the Israelis and the Palestinians.

Norwegian Foreign Minister Espen Barth Eide, chairing the committee meeting, warned the Palestinian deficit had been budgeted to be around $1.1 billion in 2013, but was more likely to be around $1.46 billion.

"This shortfall is adding $350 million to the already high levels of arrears and debts," Eide warned. "As donors we must do our utmost to reverse this trend and make the Palestinian economy sustainable."

The two sides have agreed to keep negotiating for some nine months, with the hope of having a deal at the end of it, some time towards late April or early May.

"Some people say it's too short a time to work it out. I don't think so," Kerry said.

"The fact is the two sides have been negotiating this for years ... What this really needs, there's no secret about it ... is a dose of courage and a reasonable level of compromise."