Israeli and Palestinian officials will meet in early September for their first direct negotiations in 20 months, U.S. Secretary of State Hillary Clinton said Friday.

Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas have been invited to Washington on Sept. 2, Clinton told reporters at a special briefing.

George Mitchell, special envoy for the Middle East peace talks, and U.S. Secretary of State Hillary Clinton brief reporters at the State Department in Washington on Friday. (Kevin Lamarque/Reuters)The talks will attempt "to resolve all final status issues" — borders, Jerusalem and Palestinian refugees — and "can be completed within one year," she said.

Clinton predicted "there will be difficulties ahead," but she also expressed hope.

She asked the parties "to persevere, to keep moving forward even through difficult times, and to continue working to achieve a just and lasting peace in the region."

"These negotiations should take place without preconditions and be characterized by good faith and a commitment to their success," she said.

Also invited to attend the Washington session are Egyptian President Hosni Mubarak and Jordan's King Abdullah II, "in view of their critical role in this effort," Clinton said.

U.S. President Barack Obama is scheduled to hold one-on-one talks with each of the four leaders on Sept. 1, followed by a dinner. Direct talks between Israel and the Palestinians would begin the next day, Clinton said.

Former British prime minister Tony Blair, the special representative of the "Quartet" of Mideast peacemakers — the U.S., the UN, the European Union and Russia — has also been invited to Washington.

The office of Israeli Prime Minister Benjamin Netanyahu issued a statement Friday welcoming the U.S. plan.

"Reaching an agreement is a difficult challenge but is possible," the Netanyahu statement said.

"We are coming to the talks with a genuine desire to reach a peace agreement between the two peoples that will protect Israel's national security interests, foremost of which is security."

Palestinian leaders said they accepted the invitation, but warned that they would pull out of the talks if Israel announced new settlement construction on land Palestinians consider to be part of a future state.

"If the Israeli government decides to announce new tenders on Sept. 26, then we won't be able to continue with the talks," Palestinian negotiator Saeb Erekat told Reuters.

'A residue of conflict'

George Mitchell, the U.S. special envoy for the Middle East, reportedly engaged in months of what the New York Times called "gruelling diplomacy" to make the talks happen.

Following Clinton's announcement, Mitchell acknowledged that "many previous attempts made to resolve the conflict [had] not succeeded" and had helped to sow "mistrust between the parties."

"A residue of hostility developed over many decades of conflict," he told reporters.

Ultimately, he said, Netanyahu and Abbas agreed to the talks after recognizing "that the best outcome is an agreement which results in two states living side by side in peace and security, and that the only way that can be achieved is by direct negotiation between the parties, in which the United States will be an active and sustained participant."

On July 17, Abbas said he would resume direct peace talks if Israel accepted its 1967 frontier as a baseline for the borders of a Palestinian state. He also said Israel would also have to agree to the deployment of an international force to guard them.

The last negotiations — between Abbas and then Israeli prime minister Ehud Olmert — broke off in December 2008.

With files from The Associated Press