Peres and Abbas met in New York: diplomatic source

UNITED NATIONS (Reuters) - Israeli and Palestinian leaders met in New York on Monday, a week after the latest round of Middle East peace talks ended without visible signs of progress on bridging an impasse over Israeli settlements.

Israeli President Shimon Peres, whose position is largely ceremonial, met Palestinian Authority President Mahmoud Abbas on the sidelines of the annual U.N. General Assembly meeting, said a diplomatic source who spoke on condition of anonymity.

It is unclear when Abbas will next hold talks with Israeli Prime Minister Benjamin Netanyahu, the Jewish state's lead negotiator in the direct Israeli-Palestinian peace talks that resumed on September 2 after a 20-month hiatus.

The United States, which brokered the talks' resumption, has set a goal of resolving the main issues in the decades-old conflict within a year and hopes they will gather steam despite the deadlock over Jewish settlement construction.

Palestinians are threatening to abandon the negotiations unless Israel extends a 10-month partial moratorium on new construction in the West Bank when it expires on September 30. Israel has so far rebuffed those requests.

Peres acknowledged the settlement issue was an obstacle, but said he was hopeful a solution could be found.

"I do believe that the United States as well as Israel are in a serious search how to bridge over the present difficulties," he told reporters at the United Nations.

Netanyahu, in comments released by the Israeli government, suggested the talks should continue without any conditions imposed by the Palestinians.

"I want to give these talks a chance to succeed. And I very much hope that President Abbas will have the same attitude," he said. "We got rid of the preconditions before the talks. We can't reintroduce them five minutes after the talks begin."

Separately, Peres told reporters he canceled a planned meeting in New York with Turkish President Abdullah Gul after Gul demanded that Peres publicly apologize for a May 31 Israeli commando raid on an aid flotilla that left nine Turks dead.

U.N. Secretary-General Ban Ki-moon last month announced the formation of a four-member panel of inquiry into the raid, which was widely condemned around the world.

The raid led to a sharp deterioration in Israeli-Turkish relations and forced Israel to ease the blockade of Gaza, which the Jewish state says is to prevent Palestinian Hamas militants from acquiring the military capability to attack Israel.

(Reporting by Missy Ryan and Louis Charbonneau; editing by )