BLED, Slovenia, Aug 29 (Reuters/Marja Novak) - Arab League chief Amr Moussa said on Sunday he had little hope that direct peace talks between Israel and Palestine, which are due to start on Thursday, will be successful.

He also said he will not seek re-election as secretary general of the Arab League after his second mandate expires in March.

We are hoping that talks will succeed but we are all very pessimistic about the viability of the peace process because of the past experience, Moussa told Reuters in an interview on the sidelines of a political conference in Slovenia.

He said US President Barack Obama's sponsorship of talks was the only reason to hope for success.

The only reason (for the hope in the success of the talks) is the sincerity of President Obama and his wish to achieve something good in his presidency, Moussa said.

He said Obama had given the Palestinians assurances that Israel would stop settling new territory during talks that are due to last for one year.

If we find that during that year Israel continues to build settlements, there is no use in waiting for the full year (of talks), Moussa said.

Then we will have to reconsider the situation because you cannot negotiate while the Israelis are settling the territory, he added.

Asked whether he would run for another mandate as the Arab League chief, Moussa said: It is not my intention to do so.

He refused to be drawn on his future plans and when asked whether he plans to play a role in Egyptian politics he said: This remains to be seen.

Moussa had been Egypt's foreign minister for 10 years before becoming chief of the Arab League in 2001 and has been tipped as a possible candidate for president in Egyptian elections due to be held in late 2011.