NEW YORK: US President Barack Obama launched a fresh bid to unblock Middle East peace dialogue Tuesday, meeting Israeli Prime Minister Benjamin Netanyahu, ahead of three-way talks also including the Palestinians.

Obama was also due to hold a one-one-one meeting in New York with Palestinian leader Mahmud Abbas, before using his diplomatic muscle to get both leaders together in a summit not expected to yield substantial progress.

Netanyahu will be meeting Abbas for the first time since taking office in March at the three-way encounter, which comes with peace moves are stalled, despite intense US efforts to get formal talks under way.

The three-way summit, on the sidelines of the United Nations General Assembly in New York, was due to start at 1130 am (1530 GMT).

US, Israeli and Palestinian officials have taken pains to stress that wide gaps ahead of the meeting are unlikely to be bridged.

"We have no grand expectations out of one meeting except to continue, as the president talked about from his very first day in office... the hard work, day-to-day diplomacy, that has to be done to seek a lasting peace," White House spokesman Robert Gibbs said Monday.

But the White House says the fact the meeting is taking place at all is a sign of progress.

Israeli government secretary Zvi Herzog was downbeat on army radio, saying, "conditions are not ripe for a formal relaunch of negotiations."

A Palestinian official said on condition of anonymity the talks were only taking place because his side didn't want to disappoint the Americans.

"That does not mean a resumption of peace talks."

Tuesday's talks will be less a discussion about the key final status issues including Jewish settlements in the West Bank, the borders of an eventual Palestinian state or the status of Jerusalem and Palestinian refugees, and more a bid to bring initial contacts closer.

"The expectations have plunged lower than the Dead Sea" said David Makovsky of the Washington Institute for Near East policy.

Nevertheless, he said that the three-way link-up to break the ice between Netanyahu and Abbas was still worthwhile.

"This is a necessary first step, it's an important first step."

"It makes things possible that were not possible until now," said Makovsky, co-author with Obama's Middle East advisor Dennis Ross of the book "Myths, Illusions, and Peace: Finding a New Direction for America in the Middle East."

Obama, who vowed, unlike ex-president George W. Bush, to engage in the Middle East early in his presidency, had hoped a deal on opening talks would already be sealed after exhaustive diplomacy by peace envoy George Mitchell.

But Mitchell was unable to convince the hawkish Netanyahu government to agree to the complete freeze on settlement expansion that Washington has called for and the Palestinians have demanded as a condition of starting talks.

Arab states have also snubbed Obama's call for concessions, for instance allowing overflights of Israeli commercial aircraft, as a sweetener for Netanyahu's government to contemplate talks with the Palestinians.

Obama, who is facing a flurry of testing problems at home, and a clutch of brewing foreign crises, is taking somewhat of a risk with his fungible political capital by holding the meeting at all.

Some observers, key members of the Bush administration included, argue that the symbolism of the presidency should only be brought to bear when a critical moment is in sight -- not merely as a way of kick-starting talks.

But Obama's aides say that only with consistent, focused US engagement at a high-level will Israelis and Palestinians ever move towards a consistent process of dialogue.