President Barack Obama, center, meets with Palestinian President Mahmoud Abbas, right, and Israeli Prime Minister Benjamin Netanyahu in New York on Tuesday, at the start of their first face-to-face meeting.
* U.S. may now push simply to resume talks
* Abbas wants Netanyahu to pick up where Olmert left off
* Israel worries more about Iran, Abbas about Hamas
U.S. President Barack Obama may be laying the groundwork to abandon his quest for an immediate Israeli settlement freeze and instead try to get Israel and the Palestinians directly into peace negotiations.
Obama emerged from talks with Israeli and Palestinian officials on Tuesday without the orchestrated set of steps that he had hoped would allow him to announce a resumption of peace negotiations, which have been on ice since December.
Instead, he was reduced to stressing the urgency of ending the six-decade conflict and exhorting Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas to show "flexibility and common sense and sense of compromise."
Washington wanted Israel to halt all building of Jewish settlements on the West Bank, which it has occupied since the 1967 Middle East War. It also wanted the Palestinians to do more to prevent violence against Israelis and Arab nations to take steps toward normalizing relations with the Jewish state.
Israeli officials appeared delighted that Obama said only that Israel should "restrain" its construction of settlements on occupied land in the West Bank rather than tougher demands from U.S. officials that it freeze such building entirely."Ask the Americans," Netanyahu replied, when asked by reporters what Obama meant by restraint.
Middle East analysts also questioned whether Obama may now find himself in a familiar place for U.S. presidents -- wanting a peace agreement more than the Israelis or the Palestinians.
However, while noting that Obama had by no means achieved what he might have hoped for, analysts said they did not think he would be blamed much for this.
What are the Israel and Palestine looking at?
In just one sentence at the briefing, Netanyahu made clear his top priority.
"The Iranian issue overshadows everything," he said.
Jon Alterman, director of the Middle East Program at the Center for Strategic and International Studies think tank in Washington, said Israel sees a nuclear-armed Iran as more of a threat to its existence than the Palestinians.
Abbas, he said, is more interested in reasserting control over the Gaza Strip, where the Islamist Hamas movement now holds sway.
"Each side does not think that now is the time to make serious compromises," Alterman said.
Elie Podeh, a professor in the department of Islamic and Middle Eastern Studies in the Hebrew University in Jerusalem, said "quite substantial progress" had been made toward a peace agreement during Olmert's tenure.
"Netanyahu has his own agenda and it's not a surprise he doesn't want to continue from where Olmert stopped," Podeh said. "It seems we are back to square one."
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