JERUSALEM, April 23 (Reuters) - US Middle East envoy George Mitchell told Israel and the Palestinians on Friday that President Barack Obama wants a comprehensive peace deal to be a reality soon, not in some vague and distant future time.

In a busy first day of meetings on his latest shuttle mission which comes amid strains between Israel and its closest ally, Washington's envoy stressed to both sides Obama's determination to see a settlement of the Middle East conflict.

Pressing both to end a 16-month suspension of negotiations, Obama wants proximity talks on a deal to start within weeks. He has said peace is a vital strategic interest of the United States as it battles Islamic militants abroad.

Mitchell assured Israeli Prime Minister Benjamin Netanyahu that Obama is firmly committed to the security of Israel, which says it faces an existential threat from Iran's nuclear project.

Obama also wanted to see the Palestinians have a state.

That has been American policy. That is American policy. That will be American policy, Mitchell told Netanyahu, also repeating Obama's pledge of strong and enduring ties with Israel made by the president on the Jewish state's 62nd anniversary this week.

Before going into talks in the West Bank on Friday evening with Palestinian President Mahmoud Abbas, the envoy issued a strong endorsement of Palestinian independence aspirations.

Comprehensive peace in this region must not be just a dream, he said. It must be and it can be a reality. We want to make this reality happen and soon, not in some vague and distant future time.

In Washington, the State Department cautioned against any expectation of an immediate breakthrough, and a top Palestinian aide in the West Bank said officials would have more work to do.

There will be no resumption of (proximity) talks with the Israelis in the coming days, senior Palestinian negotiator Saeb Erekat said. Abbas is still waiting for answers from Mitchell regarding Palestinian demands for a full stop to Israeli settlement activity, and Mitchell will return in May.

A senior Palestinian official said Mitchell asked Abbas to resume proximity talks but the president said he could not do so before consulting Arab states on May 1, when an Arab League follow-up committee on Middle East peace is due to meet.


WHEN IS SOON?

Mitchell said the United States wants a viable, independent Palestinian state with a contiguous territory. He said the Palestinians are entitled to their freedom and the dignity that comes with the right to determine their own future.

Netanyahu and Obama have been sharply at odds over Israeli settlements in the occupied West Bank, land Palestinians want for their state, and Israeli building in East Jerusalem.

Abbas refuses to resume negotiations suspended in December 2008 until all settlement building stops, a position Netanyahu describes as climbing a tree simply to avoid peace talks.

Mitchell is seeking Netanyahu's response to Obama's request for certain confidence-building measures to persuade Abbas to start proximity talks, hoping to move to direct negotiations between the two sides in the following months.

He is due to meet the Israeli leader again on Sunday.

Obama's suggestions were handed to Netanyahu at a low-profile meeting at the White House one month ago. There has been no official Israeli response so far.

BRIDGING SPLIT WITH OBAMA

Netanyahu is trying to bridge the split with his country's closest ally, but without yielding ground to Obama or Abbas in a way that could destroy his pro-settler coalition government.

He told Mitchell: I look forward to working with you and with President Obama to advance peace. We're serious about it. We know you're serious about it. We hope the Palestinians respond -- we have to move this process forward.

Mitchell has visited the region more than a dozen times in the past year without managing to revive talks stalled over the Palestinian total settlement freeze demand, which Israel rejects as a precondition it will not accept. (Additional reporting by Mohammed Assadi in Ramallah and Andrew Quinn in Washington; Editing by Joseph Nasr and Jon Hemming)