U.S. envoy George Mitchell told Israeli Prime Minister Benjamin Netanyahu on Friday Washington was committed to Israel's security and wanted a peace settlement that would give the Palestinians a state.

"That has been American policy. That is American policy. That will be American policy," Mitchell told Netanyahu, repeating President Barack Obama's pledge of strong and enduring ties to Israel on its 62nd anniversary earlier this week.

Netanyahu and Obama have been sharply at odds over Israeli settlements in the occupied West Bank, land Palestinians want for their state. Palestinian President Mahmoud Abbas refuses to resume talks suspended in December 2008 until settlement stops.

Mitchell is seeking Netanyahu's response to Obama's request for certain confidence-building measures to persuade Abbas to enter "proximity" talks. The suggestions were handed to the Israeli leader at a low-profile meeting with Obama one month ago.

Israel's elder statesman, President Shimon Peres, told Mitchell during a courtesy call by the envoy that it was "a vital interest" for the Palestinians to see a two-state solution. "The two of us need it," he said.

Israel did not want to govern another nation, nor to "see a conflict eating up our future", Peres added.

Netanyahu is trying to bridge the split with his country's closest ally, but without yielding ground to Obama or Abbas in a way that could destroy his pro-settler coalition government.

He told Mitchell: "I look forward to working with you and with President Obama to advance peace. We're serious about it. We know you're serious about it. We hope the Palestinians respond -- we have to move this process forward."

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Mitchell has visited the region over a dozen times in the past year without managing to revive talks stalled for 16 months now over the Palestinian demand for a total settlement freeze that Israel rejects as an unacceptable precondition.

Abbas has dismissed a partial, 10-month moratorium on construction ordered by Netanyahu five months ago.

Speaking ahead of Mitchell's latest shuttle mission, a U.S. State Department spokesman on Thursday said: "We don't go to meet just to meet. We go there because we have some indication that both sides are willing to engage seriously on the issues."

Netanyahu and Mitchell talked for about two hours. Without revealing substantive details, Netanyahu's spokesman said: "The meeting was a good one." Further talks would be held on Sunday.

Mitchell was due to meet Abbas in the West Bank city of Ramallah, north of Jerusalem, in the evening.

He began his visit by meeting Defence Minister Ehud Barak, leader of the centre-left Labour Party, who on Monday sounded a public alarm over the state of Israel's ties with Washington, saying the coalition "must act to change things".

Netanyahu said on Thursday he would not freeze building in East Jerusalem, captured from Jordan in 1967 and annexed as part of Israel's capital in a move not recognised internationally.