AFP - French President Nicolas Sarkozy on Wednesday asked Israeli Prime Minister Benjamin Netanyahu to impose a "total freeze" on Jewish settlements in the West Bank but the hawkish leader rejected the call.

Netanyahu, on his first visit to Europe since taking office in April, said after the talks with Sarkozy that Israel would not build new settlements but he did not rule out the expansion of existing settlements.

"We will not build new settlements and we will not expropriate additional lands for settlements. We know that our people are living there and, pending a final, political settlement, they have to live a normal life," he said.

The French presidency said earlier that Sarkozy had "called on Israel to immediately take all possible measures to encourage confidence" in talks with the Palestinians, "beginning with the total freeze of settlement activities."

Netanyahu had been due to meet US Middle East envoy George Mitchell in Paris but the talks were called off amid reports -- denied by Israeli officials -- of a clash over the issue of Jewish settlements in Palestinian territories.

The Israeli leader stressed good relations with the United States.

"We have, as President Obama said, unbreakable bonds of friendship, common ideals, common values and common interests with the United States," he said.

Sarkozy, keen to act as a Middle East peace-broker, has previously welcomed as "an important step forward" Netanyahu's landmark endorsement of a Palestinian state, despite conditions rejected outright by Palestinian leaders.

But Paris like Washington is insisting on a complete halt to Jewish settlement activity in the occupied West Bank, while the Israeli leader has said he will allow for "natural growth" within existing settlements.

The Palestinians have said they will not meet Netanyahu until Israel halts all settlement activity. The presence of 280,000 Israelis in more than 100 settlements across the territory has been a major obstacle to peace efforts.

The international community considers all settlements in the occupied West Bank and east Jerusalem, which Israel seized in the 1967 Six Day war, to be illegal.