RAMALLAH, West Bank, Jan 24 (Jihan Abdalla/Reuters) - EU foreign policy chief Catherine Ashton will meet Israeli and Palestinian leaders over the next two days to try to push exploratory peace talks beyond a Thursday deadline and back to full negotiations.

Negotiators from the two sides have held four meetings in Amman, Jordan, this month, but so far there has been no breakthrough that would permit resumption of the top level talks that were suspended in late 2010.

A fifth meeting is scheduled for Wednesday and without compromise, the initiative could grind to a halt.

The European Union wants Palestinian President Mahmoud Abbas to set aside his 2010 demand that Israel call a total halt to Jewish settlement building in the occupied West Bank before full talks resume.

Israel is being urged to make confidence-building moves, which could include the release of long-term prisoners and easier conditions for Palestinians in Israeli army-controlled areas of the West Bank.

The fact that negotiators are talking to each other face-to-face is encouraging, Ashton said in a statement.

I'll be looking for positive signs from both sides that they are prepared to turn this progress into real gestures and negotiations.

Israel has signaled it is willing to carry on with the talks, meaning the pressure is on the Palestinians.

The so-called Quartet on Middle East peace diplomacy, which comprises the United States, the EU, Russia and the United Nations, said last September it wanted to see direct talks resumed by Jan. 26, and completed in a year.

But Israeli Defense Minister Ehud Barak said on Tuesday that Jan. 26 is not a sacred date and that he believed the Quartet shared that view and that talks should go on.

NEW APPROACH NEEDED

Some analysts doubt whether Washington will be prepared to exercise its influence during a presidential election year. U.S. Republicans are eager to make inroads with Jewish voters, whose traditional loyalty to the Democratic Party has been tested by doubts about President Barack Obama's policies on Israel.

Other leaders have also expressed grave doubts about the peace process and urged a new approach.

Should we accept a complete freeze between the Palestinians and Israelis, when the rest of the region is moving? We have to change the method, French President Nicolas Sarkozy said in an annual address to ambassadors on Jan 20.

The Quartet has failed. Let's stop kidding ourselves. We have to widen the circle of negotiations and involve everybody who can help resolve the conflict.

Former Palestinian peace negotiator Nabil Shaath predicted failure for the latest talks, which are intended to set out the terms of negotiation on the borders of a future Palestinian state and its security arrangements with Israel.

The government in Israel feels totally safe and they know that neither the Quartet nor any of its parties will put any pressure on them. Therefore, they are making fun of them and of us as well, he told Reuters.

He said a 21-point proposal presented by Israeli Prime Minister Benjamin Netanyahu lacked any detail and was rather a composition about peace done by a high school student.

Israeli officials are quoted as saying Abbas is preparing to let the process collapse again and play the blame game. (Additional reporting by Nidal al-Mughrabi, Ori Lewis and John Irish. Writing by Douglas Hamilton)