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United States special envoy to the Middle East George Mitchell met on Friday with Palestinian President Mahmoud Abbas, who told him the Palestinian people expect the U.S. to press Israel to carry out its diplomatic obligations in regard to the peace process.

After the meeting, held in the West Bank city of Ramallah, Mitchell said that the founding of a Palestinian state is a national interest of the United States. He specified that the United States is hoping the Arab peace initiative will play a role in bringing a Palestinian state to fruition.

Mitchell also said that a two-state solution is the only solution to the Middle East crisis.

Palestinian negotiator Saeb Erekat said that Abbass stressed to Mitchell the Palestinian desire to bring a freeze in settlement building and said that Israel if does not accept previously agreed to diplomatic initiatives, it will only serve to strengthen extremists on both sides.

Mitchell is also expected to meet Friday with Palestinian Prime Minister Salam Fayed.

Mitchell's talk in Ramallah come after Prime Minister Benjamin Netanyahu -- who opposed Israel's unilateral 2005 withdrawal from Gaza, arguing that it would stoke Hamas hostility - stated he wants talks with the Palestinians to focus on security and economic matters for now, not sovereignty.

In meetings with Israeli leaders on Thursday, Mitchell stressed Obama's commitment to the goal of a two-state solution, "in which a Palestinian state is living in peace alongside the Jewish state of Israel", ending the decades-old conflict.

"That is our objective. That is what we will pursue vigorously in the coming months," Mitchell said

An Israeli official said Netanyahu also told Mitchell that any negotiations on a two-state accord should be conditioned on the Palestinians recognizing Israel as a Jewish state.

Senior Palestinian negotiator Saeb Erekat dismissed that demand as part of an effort by the two-week-old Israeli government to dodge commitments made by its predecessor to negotiate thorny issues such as statehood borders, and the future of Jerusalem and Palestinian refugees.

The Palestinians are themselves unable to present a united front as Hamas refuses to accept permanent coexistence with Israel and is shunned by Western powers as a terrorist group.

Hamas won a Palestinian legislative election in 2006, forming a unity government with Fatah that was dissolved by Abbas after the Islamists seized control of Gaza in 2007.

Egypt has been trying to arrange a new factional alliance after brokering an end to the Gaza war, which killed hundreds of Palestinian civilians and 13 Israelis, most of them troops.

Haniyeh, who was formerly prime minister under Abbas, hailed the conflict as a "big victory".

"Hamas is a big movement, the Palestinian resistance factions are deeply rooted among the people," he told reporters.