The Quartet of Middle East negotiators urged Israel and the Palestinians on Friday to resume peace talks within one month and aim for a deal by the end of 2012.
The Quartet - EU, UN, US and Russia - acted after Palestinian leader Mahmoud Abbas submitted his bid to the UN for the recognition of a Palestinian state.
Direct talks between Israel and the Palestinians stalled in September 2010. The Palestinians walked out in protest of the building of Jewish settlements in the occupied West Bank.
Israeli Prime Minister Benjamin Netanyahu told the UN the core of the conflict was not settlements but the refusal of the Palestinians to recognise Israel as a Jewish state.
Within a month there will be a preparatory meeting between the parties to agree an agenda and method of proceeding in the negotiation a Quartet statement said.
At that meeting there will be a commitment by both sides that the objective of any negotiation is to reach an agreement within a timeframe agreed to by the parties but not longer than the end of 2012.
The Quartet said that both Israel and the Palestinians should then produce comprehensive proposals within three months on territory and security, and substantial progress should be achieved within six months.
An international conference to fine-tune all outstanding issues would be held in Moscow at an appropriate time, the Middle East negotiators added. They said that Israeli and Palestinian leaders were now studying the Quartet proposals.
EU foreign policy chief Baroness (Catherine) Ashton said she hoped both sides would react positively to the plan.
If ever there was a time to resolve this conflict, it is now, Lady Ashton said.
It is now because Israel worries about its security, because the people of Palestine have waited long for their country”
The Quartet unveiled its proposals shortly after Mr Abbas formally submitted the request for a Palestinian state to become a full member of the UN.
Addressing the General Assembly in New York, he urged the Security Council to back a state with pre-1967 borders.
I call upon the distinguished members of the Security Council to vote in favour of our full membership, Mr Abbas told the General Assembly, in what was for him an unusually impassioned speech. I also appeal to the states that have not yet recognised the State of Palestine to do so, Mr Abbas said.
The time has come for my courageous and proud people, after decades of displacement and colonial occupation and ceaseless suffering, to live like other peoples of the earth, free in a sovereign and independent homeland, he said.
He added that he hoped for swift backing. Many delegates gave him a standing ovation, and some were clapping and even whistling in support.
Hours after receiving it, UN Secretary General Ban Ki-moon transmitted the Palestinian request to the Security Council.
Nawaf Salam, Lebanon's ambassador to the UN and the current Security Council president, said the application would be discussed on Monday.
In order to pass, it would need the backing of nine out of 15 council members, with no vetoes from the permanent members, but it could take weeks to reach a vote.
Currently the Palestinians have observer status at the UN.
Israel and the US have repeatedly stated that a Palestinian state can only be achieved through talks with Israel - not through UN resolutions.
I continue to hope that President Abbas will be my partner in peace, Mr Netanyahu said in his speech at the General Assembly. Let's meet here today in the United Nations. Who's there to stop us?” he added.
President Barack Obama told Mr Abbas earlier this week that the US would use its UN Security Council veto to block the Palestinian bid.
European countries tried until last minute to convince Mr Abbas to postpone his announcement.