WASHINGTON - President Barack Obama was due to hold talks with Israeli Prime Minister Benjamin Netanyahu in Washington on Monday amid floundering U.S. efforts to jump-start stalled Middle East peace talks.

The meeting between the two leaders is likely to anger Palestinians, who are already frustrated by what they perceive as backsliding by the Obama administration on the contentious issue of Israeli settlements in the occupied West Bank.

An Obama administration official said the president would meet Netanyahu, who is in Washington to address a forum of North American Jewish leaders, but gave no details about what they would discuss.

Obama's drive to revive the peace process faced a setback last week when Palestinian President Mahmoud Abbas, voicing frustration over the U.S. position on settlements, said he had no desire to stand in elections in January.

Such a move by the Western-backed Abbas could force a postponement in peace talks for months to come.

Netanyahu has rebuffed Obama's call for an immediate halt to settlement construction under a 2003 peace road map. Abbas has made a settlement freeze a precondition for restarting peace talks with Israel, suspended since December.

Obama has since eased U.S. pressure on Israel over settlements, calling for restraint in construction where he had earlier pushed for a freeze. Palestinians say that shift in policy has killed any hope of reviving negotiations soon.

We are ready to talk and the Palestinians aren't. It's as simple as that, Netanyahu told reporters traveling with him to Washington on Sunday.

Netanyahu will likely address the issue when he speaks at the forum of Jewish leaders in Washington on Monday. Obama was also due to speak there on Tuesday, but canceled his appearance in order to attend a memorial service in Texas for soldiers killed in a mass shooting at a U.S. military base last week.

In Israel, the last-minute scheduling of the White House meeting after Israeli officials said over the past several weeks that Netanyahu hoped to see Obama, was widely seen as a sign of strained relations between the two leaders.

ARAB CRITICISM

Aides to Netanyahu said he and Obama would discuss the peace process and the nuclear stand-off with Iran.

During a visit to the Middle East last week, U.S. Secretary of State Hillary Clinton faced strong Arab criticism over the U.S. stance on the settlement issue.

She insisted Washington still wanted a freeze on settlement construction but believed that resuming peace talks was the best way to curb them.

Palestinians say settlements on land Israel captured in a 1967 war could block the establishment of a state they hope to create in the West Bank and in the Gaza Strip. Gaza is now controlled by Abbas's rival, the Islamist Hamas movement.

A U.S. official said the push for negotiations was aimed in part at seeing what Netanyahu envisioned when he offered to hold talks with Abbas immediately. Thus far most of the pressure had been on Abbas to agree to negotiations, the official said.
There had been doubts about whether Obama would even meet Netanyahu until Sunday afternoon, when a U.S. official confirmed Israeli media reports a session would go ahead.

(Editing by Mohammad Zargham)

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