Israeli opposition leader Isaac Herzog said Wednesday that no peace deal was possible for now and his country must begin unilaterally separating from the Palestinians "as much as possible" to restore security.

Herzog made the comments while laying out his new security and diplomatic initiative that has caused waves in Israeli politics and sparked criticism from within his own party.

His plan comes amid a wave of Palestinian knife, gun and car-ramming attacks targeting Israelis -- violence that Herzog says amounts to a new "intifada," or uprising.

The head of the Labour-led Zionist Union coalition said he still wants a two-state solution, but does not believe Israeli Prime Minister Benjamin Netanyahu and Palestinian president Mahmud Abbas are capable of a breakthrough.

As a result, he proposes separating Palestinian areas on the outskirts of Jerusalem from the city itself and completing construction of Israel's controversial separation barrier already walling off much of the occupied West Bank.

He said that the Palestinians must also be given more civilian authority in the West Bank itself as part of "confidence-building measures", though he stressed the Israeli army would continue to operate anywhere it sees necessary in the territory.

Beyond that, Herzog wants a security conference including "all moderate parties in the region" to tackle a range of issues in the Middle East.

"I believe that we have to be realistic," Herzog said at a press conference to unveil his initiative to foreign journalists. 

"And I believe that reality calls right now to understand that, tomorrow, peace is not around the corner. What needs to be done is separating from the Palestinians as much as possible. This is taking our fate in our own hands."

He said his initiative was aimed at preserving the two-state solution while recognising progress cannot be made until the violence stops. He argued that "no other party or leader has presented a plan that is realistic."

Herzog's Labour adopted his proposals on Sunday, though some from within the party and other left-wing politicians say they amount to giving up on negotiations and moving too far to the right in hopes of gaining political ground on Netanyahu.

Netanyahu finished firmly ahead of Herzog's Zionist Union in March 2015 elections and now heads one of the most right-wing governments in Israeli history.

He has however faced criticism over the government's inability to halt the wave of Palestinian attacks.

Israeli-Palestinian negotiations have been at a complete standstill since peace talks collapsed in April 2014.

A wave of violence that erupted in October has claimed the lives of 166 Palestinians, 26 Israelis, a US national, an Eritrean and a Sudanese.

Most of the Palestinians were killed carrying out attacks, while others died during clashes and demonstrations.

Some analysts say Palestinian frustration with Israeli occupation, the complete lack of progress in peace efforts and their own fractured leadership have fed the unrest.

Israel blames incitement by Palestinian leaders and media as a main cause of the violence.