JERUSALEM - Israeli Prime Minister Benjamin Netanyahu had constructive talks Friday with U.S. President Barack Obama's envoy George Mitchell on advancing the Middle East peace process, his office said.

A statement said the two-hour meeting focused on steps for advancing the peace process.

Netanyahu agreed to continue the conversations in the coming days, it added. The U.S. envoy and his aides would meet a team of Netanyahu representatives Saturday.

Mitchell was due to hold talks Friday evening with Palestinian President Mahmoud Abbas. He made no statement on his meeting with Netanyahu, which was prefaced by mixed signals from members of the right-leaning Israeli coalition government.

Foreign Minister Avigdor Lieberman said ahead of meeting Mitchell Thursday that he intended to tell him clearly that Washington's goal of comprehensive peace is an illusion.

But center-left Defense Minister Ehud Barak, who met Mitchell later, told the envoy he believed the time had come to move determinedly forward toward a comprehensive treaty.

Netanyahu is the ultimate arbiter of policy in the coalition, whose inherent instability has been cited as one reason for not acceding to a demand by Obama and the Palestinians to suspend all settlement building.

Speaking in Tel Aviv Thursday, Mitchell said: We are determined, persevering, and we recognize the complexities and the difficulties ... We remain committed and confident that ultimately the goal of comprehensive peace will be achieved.

Low-yield peace talks limped on last year under the previous government of Ehud Olmert, until derailed by the Gaza war.

Obama has made resumption of substantive negotiations one of his policy priorities and underscored the goal in a speech to the U.N. general assembly last month, saying it was past time to stop talking about negotiations; it is time to move forward.

Obama arranged a meeting between Netanyahu and Abbas in New York, but with scant results. He said further meetings would be held at lower levels and he would receive a status report sometime in October.

The New York encounter was seen as a humiliation for Abbas by many Palestinians, and the pro-Western president now appears weakened politically.

Lieberman said there is no chance of a Middle East peace deal for many years.

There are many conflicts in the world that haven't reached a comprehensive solution and people learned to live with it, he told Israel Radio Thursday.

The Palestinians say Lieberman has made it clear why there will be no relaunch of negotiations any time soon, Abbas spokesman Nabil Abu Rdainah said. We need to hear a response to this statement from Mitchell.

There has been no word from the envoy on Lieberman's views.
Since his appointment in January, Mitchell, 76, has visited Israel and the West Bank nine times. The missions have been stymied by Netanyahu's refusal to halt settlement construction and by Arab states' reluctance to make peace overtures.

(Reporting by Dan Williams and Mohammed Assadi; writing by Doulgas Hamilton; editing by Samia Nakhoul)

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