JERUSALEM, Aug 13 (Reuters) - Moving from indirect talks to direct negotiations on the Middle East conflict may yield little unless Israeli Prime Minister Benjamin Netanyahu has a surprise in store, says a US veteran of the peace process.

It would be a mistake of epic proportions to conclude that we've now reached a fundamental turning point that is going to produce quick or easy progress let alone results, former Middle East adviser Aaron David Miller told Reuters.

Unless US President Barack Obama has heard privately from rightwinger Netanyahu of a significant shift, he would do better to park the issue until after November mid-term congressional elections in the United States, rather than risk another fight with the Israelis, Miller said.

Miller, who describes the ageing peace process as a false religion, was discussing reports that the Palestinians may be about to accede to Netanyahu's repeated call for face-to-face talks instead of indirect negotiation.

Netanyahu may be keen to deal with the Palestinians without an American babysitter present, he said. But simply changing the format of negotiations means little and could backfire on Obama, who is also pushing for direct talks.

Netanyahu spokesman Mark Regev, repeating what has become a virtual mantra for the Israeli leader, says: Ultimately, I think we all understand that only through direct talks is it possible to achieve peace between the two peoples.

Miller said that sounds right in theory. But in practice, the history of Middle East negotiations shows the opposite: indirect talks have often been more successful.

Before I left government, between the years of 1993 and 2003, direct talks on (Middle East) permanent status issues have started 10 times, said Miller, now a policy analyst at the Woodrow Wilson Center in Washington.

The problem is that even if the two sides can now agree on sitting face-to-face in the same room, they are so far apart and entrenched on the main issues that there is little hope that these talks will not fail like all others have before them.

The big issues are the competing claims on Jerusalem as a capital, a fair settlement for Palestinian refugees, the fate of Jewish settlements in the West Bank and whether Israel would be able to patrol the international borders of a Palestinian state.

Miller was an adviser to six US secretaries of state, none of whom grasped the holy grail of Middle East peace.

The reality is that direct negotiations have never been a necessary component, he said. With the exception of the 1994 peace pact between Israel and Jordan, the record shows direct talks are clearly not sufficient to generate an agreement.

ARE YOU SERIOUS?

Major powers involved in Middle East diplomacy -- Washington, Moscow, the EU and the U.N. -- are now drawing up a statement to be used the terms of reference of direct talks, if both sides agree to them in the next week.

Miller said the factors that determine whether talks have a chance of succeeding are: Is either side willing to make decisions that would push these talks forward? Are there terms of reference we're not aware of, or assurances provided? And what are American calculations of its own role?

These indicators are far more important than whether the talks go direct, he said. In fact, it could be argued that indirect talks are the much preferred alternative right now rather than pressuring the Palestinians or for that matter the Israelis into talks neither side is ready for.

Miller was puzzled why Obama, facing uphill challenges in Afghanistan and Iraq and a sputtering economy, would gamble on another possible clash with Netanyahu right before the mid-term congressional elections in November.

One possibility is that Obama has heard things from Netanyahu that go beyond what they've heard before, and that he believes Abbas will be pleasantly surprised by what he will hear from the Israelis in direct talks, Miller said.

A darker motive may be that Obama is anxious to avert a Middle East crisis in September, against the backdrop of the UN general assembly if Israel resumes building Jewish settlements in the occupied West Bank.

Netanyahu's 10-month moratorium on settlement construction on territory earmarked for a future Palestinian state, formally ends on September 26.

Miller said direct talks would be much more in line with Netanyahu's needs than with Abbas. But for Obama the wisest course could be to just 'park' this thing right now, and let the two engage in a long period of negotiations.

The surest way to produce a crisis is to push these direct talks, he added. They could collapse amid broken promises, mistrust, Israeli actions on the ground -- for example in Jerusalem -- or enormous gaps that cannot be bridged