* Settlement construction freeze due to expire Sunday
* US officials urge Israel to extend moratorium
By Andrew Quinn
NEW YORK, Sept 24 (Reuters) - U.S. Secretary of State Hillary Clinton met Palestinian President Mahmoud Abbas on Friday amid "intense" talks with both Palestinian and Israeli officials ahead of Sunday's expiry of an Israeli freeze on new settlement construction.
American officials fear that if Israel allows the settlement freeze to expire, the Palestinians will carry through on a threat to abandon direct peace talks launched just this month with the backing of U.S. President Barack Obama.
"The discussions are pretty intense right now," said Jeffrey Feltman, U.S. assistant secretary of state for Near Eastern affairs.
"We are urging Israel to extend the moratorium and we are also making clear to the Palestinians that we do not believe that it is in their interest to walk out of the talks."
Clinton met Israeli Defense Minister Ehud Barak on Monday, and has held several discussions with other Middle East leaders on the sidelines of this week's United Nations General Assembly meeting in New York, officials said.
Feltman said U.S. officials were scrambling to persuade both sides to find a way to keep the talks going.
"At this point we are urging both sides to create the atmosphere that is most conducive to a successful conclusion for negotiations and for both sides to take the negotiation process seriously," he told a news briefing.
Obama used his speech to the General Assembly on Thursday to again urge Israeli Prime Minister Benjamin Netanyahu to extend the settlement freeze in occupied territory on the West Bank, a move the Israeli leader has resisted.
Obama also called on Arab states to move toward normal ties with the Jewish state and to keep their promises of financial support for the cash-strapped Palestinian Authority.
Clinton told Lebanese President Michel Suleiman the United States would keep pushing for a comprehensive regional peace deal that will involve both Lebanon and Syria, Feltman said.
She plans to make the same point with Syrian Foreign Minister Walid al-Moualem on Monday, he added.
That meeting will mark the first time one of Obama's cabinet members has met a senior Syrian official amid signs that the two sides are moving forward with a rapprochement that began after Obama took office. (reporting by Andrew Quinn; editing by Chris Wilson)
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