NEW YORK, Sept 27 (Michelle Nichols/Reuters) - The United States voiced disappointment on Monday over Israel's decision to let a freeze on new Jewish settlement building expire but said Syria was very interested in pursuing peace with the Jewish state.

Israeli Prime Minister Benjamin Netanyahu defied U.S. President Barack Obama's wishes on Sunday by allowing a 10-month, self-imposed Israeli moratorium on new settlement construction in the occupied West Bank to lapse.

Palestinian President Mahmoud Abbas held back from carrying out his threat to abandon the Israeli-Palestinian peace talks if settlement building resumed, saying he will decide after an Oct. 4 Arab League forum and consulting Palestinian officials.

U.S. Middle East peace envoy George Mitchell leaves for the region on Monday evening and hopes to hold talks with Israeli and Palestinian officials on Wednesday and Thursday, State Department spokesman P.J. Crowley said.

Briefing reporters after Secretary of State Hillary Clinton met Syrian Foreign Minister Walid Moualem in New York, Crowley said Moualem was interested in the possibility of reviving an Israeli-Syrian peace track.

Clinton's session with Moualem was the highest-level such meeting since Obama took office in January 2009.

The secretary affirmed our objective of comprehensive peace in the Middle East, which includes the Syrian track, Crowley said. The foreign minster, Moualem, was very interested in pursuing that, and there was a pledge that we would develop some ideas going forward on how to proceed.

'WE ARE DISAPPOINTED'

Even as it hopes to open up an Israeli-Syrian track, the United States is struggling to keep alive the peace talks, which began with fanfare in Washington on Sept. 2 only to founder within weeks over the settlement-building issue.

We are disappointed but we remain focused on our long-term objective, and we will be talking to the parties about the implications of the Israeli decision, Crowley told reporters.

We recognize that given the decision yesterday we've still got a dilemma that we have to resolve, and there are no direct negotiations scheduled at this point but we will be in touch with the parties to see how we move ahead, Crowley added.

The U.S. hope appears to be that the Arab League meeting early next month might endorse continued negotiations and provide Abbas political cover to resume meeting Netanyahu despite the settlement decision.

We hope that the Arab League meeting will continue to affirm its support for the process, Crowley said.

Netanyahu's decision to allow the settlement moratorium to lapse was a blow for Obama, who has made Israeli-Palestinian peace a priority since taking office in January 2009 and who made no secret that he wanted Israel to extend the freeze.

An abrupt end to the talks, so soon after they began, would be a sharp political blow to Obama ahead of U.S. congressional elections in November in which his Democratic Party is widely expected to suffer losses.

When he launched the talks, Obama set a target of resolving the main issues in the six-decade-old dispute within a year.

The status of Jerusalem, the fate of Palestinian refugees, the borders of a future Palestinian state and security arrangements are the main issues Abbas and Netanyahu would have to resolve to secure a permanent peace deal.

The settlements are on territory captured by Israeli forces from Jordan in the 1967 Middle East war and are deemed by the World Court to be illegal, a finding disputed by Israel.

(Reporting by Michelle Nichols; Writing by Arshad Mohammed; Editing by Will Dunham)