Factbox: Key players in the Mideast peace talks

WASHINGTON (Reuters) - The Obama administration is hosting Israeli and Palestinian leaders this week in an effort to restart direct Middle East peace negotiations after a 20-month hiatus.

President Barack Obama is due to hold separate meetings on Wednesday with Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas at the White House.

Netanyahu and Abbas will go to the State Department on Thursday, where they are due to begin direct talks in a meeting hosted by Secretary of State Hillary Clinton.

ISRAELI PRIME MINISTER BENJAMIN NETANYAHU

The right-wing Israeli leader has promised to confound skeptics and take political risks for peace -- while ensuring any deal on Palestinian statehood does not threaten Israel's security.

The steps he takes on Jewish settlement construction, once a limited freeze expires on September 26, could be key to whether Israeli-Palestinian talks continue.

Netanyahu's relationship with Obama has been rocky and he is and wary of alienating the president while Israel looks to him to lead the way in curbing Iran's nuclear ambitions. Netanyahu has taken a number of measured moves to smooth over differences over Middle East peacemaking.

In a major policy speech last year, Netanyahu said for the first time he was prepared to see the creation of a Palestinian state -- a key U.S. goal -- on condition that it was demilitarized.

Under U.S. pressure, last November he imposed a 10-month moratorium on housing starts in Jewish settlements in the occupied West Bank. That step fell short of Palestinian demands for a permanent freeze.

But it won U.S. praise and a call by the White House, echoing Netanyahu's own appeal, for the Palestinians to begin direct talks with Israel without preconditions.

In the coming negotiations with the Palestinians, Netanyahu must take into consideration the impact any Israeli compromises could have on his fragile governing coalition, dominated by pro-settler parties, including his own Likud.

PALESTINIAN PRESIDENT MAHMOUD ABBAS

Abbas had sought progress in indirect negotiations with Israel, which began in May, before any move to face-to-face talks. He has spoken of unprecedented international pressure to persuade him to resume direct negotiations suspended since late 2008.

He has threatened to quit the talks if Israel presses ahead with settlement construction after the moratorium expires on September 26.

Abbas wields power only in the West Bank since losing control of the Gaza Strip to Hamas Islamists in internal Palestinian fighting in 2007, raising questions as to whether he has the political clout to finalize and implement any statehood deal with Israel.

SECRETARY OF STATE HILLARY CLINTON

Although Clinton has been a strong supporter of Israel, the top U.S. diplomat had some harsh words for the country earlier this year. In March, she called Israel's behavior insulting when it announced the building of more settler homes around Jerusalem during a visit by U.S. Vice President Joe Biden.

However, Clinton also was quick to praise Israel for its decision to limit settlement construction in the West Bank for 10 months, even though it fell short of the U.S. goal of a full freeze.

At the time Clinton said the 10-month moratorium would help toward resolving the Israeli-Palestinian conflict.

Now the former presidential candidate and Middle East envoy George Mitchell will help Netanyahu and Abbas hash out terms for a peace deal.

Clinton, who has vowed a pragmatic approach to U.S. diplomacy, has said the United States believes that all major issues between could be resolved between the Israelis and the Palestinians within a year.

U.S. MIDEAST ENVOY GEORGE MITCHELL

The veteran diplomatic troubleshooter has been shuttling between Abbas and Netanyahu for the past few months in an attempt to overcome final barriers to direct negotiations.

He says the United States is prepared to offer its own proposals to bridge differences between the Palestinians and Israelis but that the bulk of the negotiations will be left to the Middle Eastern foes to hash out.

Mitchell, who helped broker a deal that ended years of conflict between Roman Catholics and Protestants in Northern Ireland, also has spent years delving into thorny Middle Eastern issues and is known as a formidable if soft-spoken negotiator.

The former senator was plucked by U.S. President Bill Clinton to lead an international fact-finding group on Middle East violence.

His 2001 report called for Israelis to freeze construction of new settlements and stop shooting at unarmed demonstrators, and Palestinians to prevent attacks and punish those who perpetrated them.

(Writing by Jeffrey Heller and Rachelle Younglai; Editing by Bill Trott)