Palestinian President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu have shaken hands and exchanged brief words at the funeral of Shimon Peres, the former Israeli leader.

US President Barack Obama and other world leaders gathered for the burial in Jerusalem's Mount Herzl cemetery, two days after Peres, a former president and premier, died at the age of 93.

"Long time, long time," Abbas told Netanyahu and the prime minister's wife Sara, after shaking his hand before the start of the state ceremony.

Welcoming Abbas, as participants recorded the encounter on their mobile phones, Netanyahu said of his attendance: "It's something that I appreciate very much on behalf of our people and on behalf of us."

But Abbas's rare visit to the city, a short drive through Israeli military checkpoints from Ramallah, in the occupied West Bank, seemed unlikely to yield anything more than handshakes.

Israeli-Palestinian negotiations have been frozen since 2014 and Netanyahu and Abbas, deeply divided over Jewish settlement on land Palestinians seek for a state and other issues, have not held face-to-face talks since 2010.

Abbas was given a front-row seat between European Council President Donald Tusk and Hungarian Prime Minister Viktor Orban. Obama briefly greeted the Palestinian leader with a kiss on each cheek before walking down the line to stand next to Netanyahu.

Peres, who died two weeks after a stroke, jointly won a Nobel Prize for his peace efforts with the Palestinians in the 1990s, landmark talks that have failed to achieve a final land-for-peace agreement.

Obama and Netanyahu were to deliver eulogies at the cemetery, which overlooks the Jerusalem forest and a verdant valley, in what could be an opportunity for the president to encourage Israelis and Palestinians to revive peacemaking.

Outside Israel's parliament on Thursday, an estimated 50,000 Israelis filed past Peres's flag-draped coffin as it lay in state.

The leaders of Egypt and Jordan, the only Arab states to have signed peace treaties with Israel, were not on the roster of participants issued by Israel's Foreign Ministry. But the Egyptian foreign minister was scheduled to attend and King Abdullah of Jordan sent a telegram of condolences.

Britain's Prince Charles, French President Francois Hollande, Italian Prime Minister Matteo Renzi, Polish President Andrzej Duda, Canadian Prime Minister Justin Trudeau and former British leaders David Cameron and Tony Blair were also on a long list of foreign dignitaries attending the funeral.