* Mitchell says peace-within-a-year goal is realistic
* U.S. tries to resolve settlement freeze issue
By Matt Spetalnick
WASHINGTON, Aug 31 (Reuters) - President Barack Obama's envoy said on the eve of a Middle East peace summit that it was time to take advantage of a "window of opportunity" to end the decades-old conflict as he sought to overcome broad skepticism about the U.S. diplomatic effort.
While acknowledging obstacles that have outlasted many a U.S. leader, George Mitchell, Obama's troubleshooter for the region, insisted the administration's bid to achieve an Israeli-Palestinian peace deal within a year was realistic.
But underscoring the daunting challenges, four Israelis were killed in the occupied West Bank on Tuesday in an attack claimed by Hamas as an assault on the fledgling peace process.
News of the ambush came after Mitchell briefed reporters on the agenda for Obama's separate talks with Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas on Wednesday followed by a resumption of face-to-face negotiations on Thursday.
"There is a window of opportunity, a moment in time within which there remains the possibility of achieving a two-state solution," he said.
On the prospects for completing a peace accord in just 12 months' time, Mitchell said, "We believe that it can be done."
Many Israelis and Palestinians are deeply pessimistic about the first direct talks in 20 months, and most analysts see little chance of a breakthrough given the level of distrust.
The Obama administration sees progress on the Israeli-Palestinian front as a way to marshal Arab support against Iran's regional influence and also as a potential boost for the president's outreach to the Muslim world.
FIRST TEST?
Obama aides were working behind the scenes trying to resolve what is seen as the first major test for the revived peace process -- the looming Sept. 26 expiration of partial freeze on Israeli settlement construction in the West Bank.
The Palestinians have threatened to pull out of the talks unless the 10-month moratorium is extended, but Netanyahu, who heads a government dominated by pro-settler parties including his own, has given no sign he is ready to take that step.
Mitchell stopped short of pressing Netanyahu to keep the moratorium, but urged both sides to refrain from actions that would "hinder" peace efforts.
Abbas comes to the talks weakened by Hamas Islamists' control of Gaza while he governs only in the West Bank. The group, whose charter calls for Israel's destruction, made clear with Tuesday's attack it hopes to disrupt the negotiations.
Speaking before the ambush, Mitchell said Hamas would be welcome in the peace process if it dropped its refusal to renounce violence and accept democratic norms.
Mitchell, who helped broker a Northern Ireland peace deal, even drew a loose analogy to the Irish Republican Army and Sinn Fein's initial refusal to enter negotiations.
Previewing the U.S. strategy, Mitchell expressed hope that Netanyahu and Abbas would meet every two weeks. He vowed sustained U.S. engagement -- something Obama had promised -- but did not expect a U.S. presence at every session.
Mitchell said Egyptian President Hosni Mubarak and Jordan's King Abdullah would attend the summit to help promote broader Arab-Israeli peace and that the United States was still working to reconcile the Jewish state with Syria and Lebanon.
Mitchell acknowledged that developments in the West's standoff with Iran, Israel's arch-foe, could influence the Middle East peace process but declined to elaborate.
(Editing by Eric Beech)
Our Standards: The Thomson Reuters Trust Principles.
