Prime Minister Ehud Olmert rejected an initiative by his British counterpart Tony Blair to renew long-stalled peace talks with the Palestinians, the British Sunday newspaper The Observer reported.
Blair dispatched his envoy to the Middle East Lord Levy to Ramallah and Jerusalem where Olmert expressed coldness to the proposal.
Blair and Levy refused to confirm or deny the report, the newspaper said.
Blair faces mounting criticism among backbenchers for doing little to revive the peace process.
During next month's Labor conference Blair is expected to face calls to name a date for his departure from Downing Street, the newspaper predicted.
The newspaper said despite Israel's rebuff of the proposal, Blair plans to visit the region next month.