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By Douglas Hamilton
JERUSALEM (Reuters) - Israeli Prime Minister Benjamin Netanyahu had "constructive" talks on Friday with U.S. President Barack Obama's envoy George Mitchell on advancing efforts to achieve peace with the Palestinians, his office said.
A statement said the two-hour meeting focussed "on steps for advancing the peace process."
Netanyahu, whose refusal to freeze West Bank settlement construction has opened a rare rift with Washington, agreed to further talks in the coming days. The U.S. envoy and his aides were expected to meet a team of Netanyahu aides on Saturday.
Mitchell later met Palestinian President Mahmoud Abbas and, in remarks afterwards to reporters, acknowledged the continued challenges.
"We do not underestimate the difficulties for us or for the parties, but we all have obligations to do everything we can to help achieve the goal of comprehensive peace that will be good for the Palestinians, good for the Israelis, good for all the people in this region," Mitchell said.
He said that Israeli and Palestinian envoys had been invited to continue their consultations in Washington. Chief Palestinian negotiator Saeb Erekat told reporters that he saw those talks taking place "maybe in the next two weeks."
Mitchell's mission -- the ninth by the 76-year-old trouble-shooter since his appointment in January -- saw mixed messages from Netanyahu's rightist coalition government.
Foreign Minister Avigdor Lieberman said ahead of meeting Mitchell on Thursday that he intended to "tell him clearly" that Washington's goal of comprehensive peace was an illusion.
But centre-left Defence Minister Ehud Barak separately told Mitchell he believed "the time had come to move determinedly forward" towards 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 Jewish settlement building on occupied land seen as part of a future Palestinian state.
Abbas also has credibility problems, as his Islamist Hamas rivals control the Gaza Strip -- half the Palestinian polity -- and rule out any permanent peace accord with the Jewish state.
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 was 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 on 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 was no word from the envoy on Lieberman's views.
(Reporting by Dan Williams and Mohammed Assadi; writing by Doulgas Hamilton; editing by Richard Williams)

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