WASHINGTON (Reuters) - The United States is hopeful Israel and the Palestinians will hold a preliminary meeting to revive peace talks on October 23 in Jordan, a U.S. State Department spokeswoman said on Tuesday.

"The proposal that they are discussing with the parties is for October 23 in Jordan and we are very hopeful that both parties will take up that offer," spokeswoman Victoria Nuland told reporters at her daily briefing.

She was referring to a proposal floated by the "Quartet" of the European Union, Russia, the United Nations and United States, which on September 23 called on the parties to hold a preliminary meeting within a month and resume peace talks with a view to resolving their dispute by the end of 2012.

It is unclear whether the two sides are willing to compromise over the central issue that caused talks to break down more than a year ago -- Israel's construction of Jewish settlements on West Bank land..

Palestinian President Mahmoud Abbas has demanded that Israel halt all settlement building in the West Bank, which Israel occupied during the 1967 Middle East war, before Palestinians will restart talks.

Israel has made clear it is not ready to suspend settlement expansion beyond a 10-month hiatus it implemented a year ago, an issue over which U.S.-sponsored negotiations between the sides have remained frozen since September 2010.

Last month, Abbas formally asked the United Nations to recognize a Palestinian state in the West Bank and Gaza Strip, a move opposed by Israel and the United States. They say only a negotiated peace can end the Middle East conflict and create a Palestinian state alongside Israel.

(Reporting by Arshad Mohammed; Editing by Bill Trott)