Obama urges restart of Mideast negotiations

NEW YORK (Reuters) - U.S. President Barack Obama, making his most direct foray into Middle East diplomacy, on Tuesday called Israelis and Palestinians to act with a sense of urgency to get formal peace negotiations back on track.

"Permanent status negotiations must begin and begin soon," Obama told reporters as he sat down for a three-way meeting with Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas.

During the meeting where no major breakthroughs had been expected, Obama coaxed the two into a handshake and stood back as they gripped hands, both smiling slightly.

"It is past time to talk about starting negotiations. It is time to move forward," Obama said.

He said that since his administration took office in January there has been progress toward laying a foundation for the resumption of peace talks "but we still have much further to go."

Obama said his top Mideast negotiator, George Mitchell, would meet with Israeli and Palestinian negotiators again next week. He also said U.S. Secretary of State Hillary Clinton would report back to him in October on the status of talks.

(Reporting by Matt Spetalnick and Caren Bohan, Editing by Sandra Maler)