OTTAWA (AFP) - Palestinian president Mahmud Abbas on Tuesday stressed his willingness to reach a peace agreement with Israel, on the eve of a visit to Washington where he hopes to obtain support for the stalled Middle East peace process.

"We hope the Israelis will understand that we are working hard to achieve peace and that we will do everything we can to reach that goal," Abbas said at a ceremony marking the opening of a new Palestinian representative office in Ottawa.

During his two-day visit to the Canadian capital, Abbas held talks with Prime Minister Stephen Harper on the peace process and bilateral relations.

Harper "stressed the importance of peace talks and both leaders discussed options for approaches to some of the key final status issues" - that include the status of Jerusalem, borders, Palestinian refugees and Israeli security - his spokesman said in a statement.

"Canada believes that these issues must be settled between the parties themselves. Canada also remains prepared to assist in the peace process in anyway the parties would find useful, and will continue the support it has provided on the security and refugee issues."

The spokesman did not mention the issue of settlements, but Canadian Foreign Minister Lawrence Cannon said Israel's expansion of settlements in the occupied West Bank was "illegal" and hurt the peace process.

Israeli Prime Minister Benjamin Netanyahu has ignored calls from the United States for a complete freeze on settlement building in the occupied West Bank and rejected limits on building Jewish enclaves in Jerusalem.

But Israeli media said Tuesday that Netanyahu is willing to tear down settlement outposts in the occupied West Bank in return for US backing on its stance on arch-foe Iran.

Abbas, who is to hold his first White House meeting with Obama on Thursday, said Monday that Israel's refusal to stop building settlements in the occupied West Bank would be a main talking-point of his trip to Washington.

The Palestinian authority has ruled out restarting peace talks with Israel unless it removes all roadblocks and freezes settlement activity in the occupied West Bank, top negotiator Ahmad Qorei told the Haaretz daily.

He was referring to settlements in the occupied West Bank built without authorization from the Israeli government and the more than 600 barriers that Israel erected in the aftermath of the second Palestinian intifada that severely hamper freedom of movement in the occupied West Bank.

Abbas will present the conditions during his first White House meeting with US President Barack Obama Thursday, Qorei said.

The chief negotiator also reiterated the Palestinians' refusal to recognize Israel as a Jewish state as demanded by the right-wing Israeli president as part of a final agreement.