(Adds U.S. Secretary of State Rice; paragraphs 5-7)

By Louis Charbonneau

UNITED NATIONS, Sept 25 (Reuters) - The U.N. Security Council has agreed to end months of silence and discuss Israeli settlement activities on land the Palestinians want for a future state, a U.N. spokeswoman said on Thursday.

The meeting will take place on Friday, the same day the Middle East Quartet -- Russia, the United States, the European Union and the United Nations -- will convene on the sidelines of the U.N. General Assembly to discuss the peace process.

The meeting was requested by Saudi Arabia with the backing of Arab foreign ministers, who met in New York to discuss the settlements issue on Wednesday.

Western diplomats said the council was not expected to take any action by issuing a joint statement or resolution. The 15-nation Security Council has been unable to reach a consensus on anything related to the Middle East for months.

In an interview with al-Hurra television, U.S. Secretary of State Condoleezza Rice made no attempt to hide the fact that she would saw no point in Friday's council session.

"At this point I just don't see the value in doing so," she said. "But the Security Council can take these issues up at any time."

"But let's take it up in the Quartet, which is the appropriate and internationally recognized forum for these issues," she added.

The main reason for the council deadlock, Western diplomats say, has been U.S. frustration with debates on the Israeli blockade of the Gaza Strip earlier this year and Arab states' refusal to denounce the militant group Hamas, which seized power in Gaza last year and advocates destroying Israel.

The U.S. delegation has complained that council sessions on the issue have not been constructive, mostly due to the presence on the council of Libya, a long-time foe of the Jewish state.

Arab diplomats have accused Washington of blocking council discussion of Jewish settlement expansion in the occupied West Bank, a problem they say is undermining the peace process.

Israel says the Palestinians have failed to meet their obligation to rein in militants.

According to a report by Israeli human rights group B'Tselem, Israeli authorities and settlers have seized land in the West Bank for security zones around Jewish settlements beyond an Israeli-built barrier.

The barrier is deemed illegal by the World Court because it is being built in part on occupied territory, but Israel says it is necessary to keep Palestinian suicide bombers out.

The Palestinians condemned the project as a land grab and say settlement expansion could deny them a viable state. (Additional reporting by Haitham Haddadin; Editing by Doina Chiacu)

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