By Dan Williams

JERUSALEM (Reuters) - Israel has complained to U.S. Secretary of State John Kerry about statements by the Palestinians which it said undermined nascent peace talks, an Israeli official said on Saturday.

"Incitement and peace cannot coexist," the official quoted Prime Minister Benjamin Netanyahu as telling Kerry, the negotiations' sponsor, in a letter sent over the weekend.

The complaint underscored the recrimination and distrust on both sides that threaten the talks, even as Israel prepares to free scores of Palestinian prisoners ahead of a second round of discussions next week.

According to the official, Netanyahu's letter referred to an assertion Palestinian President Mahmoud Abbas made on July 29 that a future Palestinian state "would not see the presence of a single Israeli - civilian or soldier".

Netanyahu also cited an official Palestinian television broadcast of a goodwill visit by the Barcelona football club to the occupied West Bank last week, during which a sportscaster, speaking in voiceover, described Israeli towns and cities as Palestinian - as did a singer who performed on the pitch.

"Rather than educate the next generation of Palestinians to live in peace with Israel, this hate education lays the ground for continued violence, terror and conflict," the letter said.

The U.S. embassy in Israel did not immediately return a call for comment on Netanyahu's letter to Kerry.

The Palestinians have themselves long accused Israel of poor faith in peacemaking, given its expansion of Jewish settlements in the West Bank which most world powers deem illegal. Netanyahu's rightist coalition government includes pro-settler factions, one of which openly opposes Palestinian statehood.

Asked about Netanyahu's letter, Hanan Ashrawi of Abbas's Palestine Liberation Organisation, dismissed it as "a desperate attempt to distract the world's attention away from their egregious violations of international law".

(Additional reporting by Noah Browning in Ramallah; Writing by Dan Williams; Editing by Robin Pomeroy)