WASHINGTON (Reuters) - U.S. Secretary of State John Kerry called on Monday for Israel and the Palestinians to make "reasonable compromises" for peace as he prepared to preside over their first direct negotiations in nearly three years.
"It is no secret this is a difficult process. If it were easy, it would have happened a long time ago," Kerry said with his newly named envoy for Israeli-Palestinian peace, former U.S. ambassador to Israel Martin Indyk, at his side.
"Many difficult choices lie ahead for the negotiators and for the leaders as we seek reasonable compromises on tough, complicated, emotional, and symbolic issues," Kerry added.
In a sign of the challenges, the parties differed in public about the agenda for the talks, with an Israeli official saying all issues would be discussed simultaneously and a Palestinian official saying they would start with borders and security.
The United States is seeking to broker an agreement on a "two-state solution" in which Israel would exist peacefully alongside a new Palestinian state created in the West Bank and the Gaza Strip, lands occupied by the Israelis since a 1967 war.
The major issues that need to be resolved to bring an end to more than six decades of conflict include borders, the future of Jewish settlements on the West Bank, the fate of Palestinian refugees and the status of Jerusalem.
The resumption of peace talks is an achievement for Kerry, who made six trips to the region in the past four months to coax the two sides to the table. Many analysts are sceptical about the chances of reaching a peace deal, in part because of internal divisions among the Palestinians and the Israelis.
The talks, slated to last nine months, were set to begin at the State Department over an iftar dinner - the evening meal at which Muslims break their daily Ramadan fast - at 8 p.m. on Monday (0000 GMT on Tuesday), U.S. officials said.
They are due to continue on Tuesday, when Kerry is expected to make an announcement on the next steps.
In a statement, President Barack Obama urged both sides to negotiate in good faith and said "the United States stands ready to support them throughout these negotiations."
The talks will be conducted by senior aides to Israeli Prime Minister Benjamin Netanyahu - Israel's Justice Minister Tzipi Livni and Yitzhak Molcho - and to Palestinian President Mahmoud Abbas - represented by Saeb Erekat and Mohammed Ishtyeh.
Even Indyk, who has previously served as the top U.S. diplomat for the Middle East and twice as U.S. ambassador to Israel, noted that when Kerry began his efforts this year almost no one thought he would succeed in reviving the negotiations.
"You took up the challenge when most people thought you were on a mission impossible," Indyk said.
Abbas and Netanyahu may have enormous difficulty convincing their own people to accept the compromises needed for peace, Middle East expert Rob Danin of the Council on Foreign Relations think tank wrote on Monday. He added that "both sides will be negotiating, not only with each other across a table, but also with their own people back home."
Resuming talks is unpopular among Abbas's supporters in his Fatah movement and the umbrella Palestine Liberation Organization, he said, let alone with the Islamist Hamas group that rules the Gaza Strip and has condemned the effort.
"Netanyahu's domestic situation is also difficult," Danin added, saying some of his coalition partners oppose the creation of a Palestinian state and he may have to follow some of his predecessors in leaving the Likud party in order to make concessions.
Indyk is a veteran of U.S. efforts to resolve the conflict. He was a senior official in former President Bill Clinton's administration, which oversaw a failed summit in 2000 after which violence erupted in Israel and the Palestinian territories.
The last direct negotiations collapsed in late 2010 over Israel's construction of Jewish settlements on occupied land it seized in a 1967 Middle East war.
Previous attempts to resolve the conflict have sought to tackle easier disputes first and defer the most emotional ones like the fate of Jerusalem and Palestinian refugees.
This time, "all of the issues that are at the core of a permanent accord will be negotiated simultaneously," Silvan Shalom, a member of Netanyahu's cabinet and rightist Likud party, told Israel's Army Radio.
The Palestinians, with international backing, want their future state to have borders approximating the boundaries of the West Bank, adjacent East Jerusalem and the Gaza Strip before Israel captured them in the 1967 Middle East war.
Yasser Abed Rabbo, a senior official in the Palestine Liberation Organization, said the U.S. letter of invitation to the talks had not specified which disputes were to be discussed.
But Abed Rabbo told Voice of Palestine radio the talks "will begin, in principle, on the issues of borders and security."
In what it called a goodwill gesture to restart diplomacy, the Israeli cabinet on Sunday approved the release of 104 long-serving Palestinian security prisoners in stages. Thousands more Palestinians remain in Israeli jails.
In picking Indyk, Kerry said he has chosen someone with deep experience in the region and the confidence of both sides.
Ghaith al-Omari, executive director of the Washington-based American Task Force on Palestine advocacy group, praised Indyk as a good choice for the job.
"The deep personal knowledge that he has of both Abu Mazen (Abbas) and Netanyahu will be very important at times of crisis," al-Omari said. "So much depends on trust, and trust is easier to give when you have a known quantity in front of you."
Indyk recalled a story from his earlier service in government when his son, at age 13, designed a screensaver that consisted of a single question that flashed across his computer screen: "Dad, is there peace in the Middle East yet?"
"For 15 years, I have only been able to answer him, 'Not yet,'" Indyk said. "Perhaps, Mr. Secretary, through your efforts and our support we may yet be able to tell Jake - and, more importantly, all those young Israeli and Palestinians who yearn for a different, better tomorrow - that this time we actually made it."
Additional reporting by Dan Williams in Jerusalem and Ali Sawafta in Ramallah; Editing by Alistair Bell and Will Dunham