Washington's Middle East envoy George Mitchell arrived for talks with Israeli and Palestinian leaders, as the European Union backed off from an immediate recognition of a Palestinian state.

Mitchell flew in Monday for talks with Israel's Benjamin Netanyahu — he was due to meet Palestinian president Mahmud Abbas Tuesday — as the Palestinians called for a meeting of the Mideast Quartet to try to save the peace process.

In Brussels meanwhile, EU foreign ministers reaffirmed their commitment to two states for two peoples, within the framework of a "negotiated solution", but stopped short of outright recognition.

Before meeting Mitchell, Netanyahu expressed relief that the focus had been taken off Israeli settlement activity and placed firmly on the core issues — which Washington now wants to address through indirect talks.

"The US has understood that what is important is to reach the real issues, including the core issues at the heart of the conflict between us and the Palestinians," the Israeli premier said at a conference in Tel Aviv.

"When these gaps narrow, we will reach direct negotiations, with the aim of reaching a framework agreement for peace," he said.

Last week, Washington acknowledged it had failed to secure a new Israeli settlement freeze, effectively signalling the end of direct peace talks and a return to the "proximity" talks begun in May and overseen by Mitchell.

Direct talks began on September 2, but stalled three weeks later with the end of an Israeli moratorium on settlement building. The Palestinians refused to talk while Israel continued building.

"We're going to work together to establish a new path to achieve a common goal, which is to get a framework agreement for peace that will ensure both peace and security," Netanyahu told reporters before meeting Mitchell.

"We hope our Palestinian neighbours will participate with us to achieve that in the coming months," he added.

Mitchell said only: "In their direct talks, both sides decided together to pursue a framework agreement that would establish the fundamental compromises on all permanent status issues, and pave the way for a final peace treaty."

The US envoy will meet Abbas on Tuesday.

Before his arrival, the Palestinian leadership called for an urgent meeting of the Middle East Quartet, which comprises top diplomats from the United States, the European Union, Russia and the United Nations.

"The Palestinian leadership calls for a broad international effort to ensure the protection of the peace process, including an urgent meeting of the Quartet committee to lay the foundation for a renewal of the peace process," said Yasser Abed Rabbo, secretary general of the PLO's executive committee.

He also called for the Palestinian leadership to coordinate Arab and international efforts to get the talks back on track.

At the same time Abbas, in a phone call with EU foreign policy chief Catherine Ashton, urged the European Union to recognise a Palestinian state.

"Ashton spoke today with president Abbas who called on the European Union to take a step towards recognition of the state of Palestine based on the 1967 borders," chief Palestinian negotiator Saeb Erakat told AFP.

"We hope that the European Union will take this step to maintain the requirements for the success of the peace process that were thwarted by Israel."

The Palestinians also wrote to EU foreign ministers meeting in Brussels, urging them to recognise a Palestinian state so as to "provide protection for the principle of two states as well as for the peace process," Erakat said.

Last week, 26 former EU leaders, including Ashton's predecessor Javier Solana, signed a letter urging Ashton to threaten Israel with sanctions for failing to respect the freeze.

But diplomatic sources said Monday EU member states remain divided on the issue.

European foreign ministers in Brussels on Monday reaffirmed a readiness to recognise a Palestinian state at an "appropriate" time, but stopped short of outright recognition despite mounting pressure to break the impasse.

The EU ministers' statement expressed "regret" at Israel's rejection of a new freeze, describing settlements as "illegal" and "an obstacle to peace."

Over the past few weeks, Palestinian officials have been talking up their options if peace talks with Israel totally collapse.

One is to seek recognition for a unilateral declaration of statehood on the basis of the 1967 borders, including the West Bank, the Gaza Strip and occupied east Jerusalem.

After Tuesday's meeting Mitchell, Abbas will travel to Cairo to discuss developments with Arab League diplomats.

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