NEW YORK ( CNN ) -- Prodding Israel and the Palestinian Authority to restart talks aimed at a permanent resolution of their decades-old conflict , President Obama dropped a demand for an Israeli settlement freeze , U.S. , Israeli and Palestinian officials said . Benjamin Netanyahu , left , President Obama and Mahmoud Abbas . `` Simply put , it is past time to talk about starting negotiations . It is time to move forward , '' Obama told reporters before a meeting with Palestinian President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu . `` It is time to show the flexibility and common sense and sense of compromise that is necessary to achieve our goals , '' Obama said . Obama first met separately with Netanyahu and Abbas on the sidelines of the U.N. General Assembly in what he called `` frank and productive '' talks . The session was the first among the three leaders since Obama took office in January . George Mitchell , Obama 's envoy for the Middle East , attended Tuesday 's talks . He said the talks were `` at all times cordial , '' but `` direct '' and sometimes `` blunt . '' Obama told Abbas and Netanyahu that , `` The only reason to hold public office is to get things done , '' and that everyone `` must take risks for peace , '' Mitchell said . Mitchell told reporters the U.S. is `` not identifying any issue as being a precondition or an impediment to negotiation . '' But the United States and Israel have publicly disagreed on Israeli plans to build more housing on land the Palestinians regard as theirs . Previous Obama administration demands for a freeze have been ignored by the Netanyahu government . Watch Netanyahu address peace , settlements » . Abbas has so far rejected resuming talks with Israel until the Jewish state halts all settlement building in the occupied West Bank and in predominantly Palestinian East Jerusalem . Arab states also have balked at the U.S. request to take confidence-building measures toward Israel until Israel freezes settlement construction . Sitting with Netanyahu and Abbas , Obama softened his regular language on a settlement `` freeze , '' saying that Israel has had meaningful discussions about `` restraining '' settlement activity . `` But they need to translate these discussions into real action on this and other issues , '' he said . `` Obama told Abbas that he could n't get the settlement freeze and promised to keep trying , but that it should n't be a condition for talks and it was time to move on , '' one Palestinian aide to Abbas said . Several U.S. officials said that Obama told Abbas that although the U.S. believe a settlement freeze would create a better atmosphere for talks to begin , the lack of one should not be used an as excuse not to talk . `` Let 's not have the perfect be the enemy of the good , '' Obama told Abbas , according to the officials . Watch Obama : 'We have to find a way forward ' » . `` It 's been apparent for some time that the Israelis were going to fall short of what is necessary on the settlement freeze , '' one senior U.S. official said . `` But our view is let 's get to negotiations and settlements will be addressed within those final status issues '' A senior Israeli diplomat said Israel agreed to not building any new settlements , no outward expansion of existing growth and to only build for `` natural '' growth within existing settlements . He said Israel also agreed not to encourage Israelis to move to settlements , which would increase the population . `` A complete settlement freeze was n't physically or politically possible , especially in the absence of any Arab or Palestinian concessions , '' the Israeli diplomat said . `` There was a time the gaps had significantly narrowed , but now they were starting to widen . The administration recognized , rather than have them widen further , we should start negotiating . '' The Palestinian aide to Abbas said Obama 's failure to secure a settlement freeze has weakened him in the eyes of the Palestinian delegation , because it casts doubt on his ability to move Israel during final status negotiations . The Palestinians did win an important point , however , with Obama making clear that the peace talks would not start from scratch , which Netanyahu had favored . Rather the talks would take into account progress made in previous negotiations between Israelis and Palestinians , the sources said . The Israeli diplomat said that Israel would `` take into account '' the previous negotiations , but stressed his country 's longstanding position that `` nothing is agreed to until everything is agreed to . '' Obama also addressed Abbas ' desire to have the terms for negotiations more clearly defined , asking Israeli and Palestinian negotiators to come to Washington next week for further talks . Next week 's talks , to be led by George Mitchell , will center on what issues will be addressed at negotiations , which will present the U.S. with its next big challenge . Palestinians want negotiations to resolve the `` final status '' issues of the conflict , such as borders , Jerusalem and the right of return for Palestinian refugees . Israel wants to begin with talks on a `` provisional '' Palestinian state .
NEW : Israel agrees to some limits on West Bank settlement growth . ` ` It is past time to talk about starting negotiations , '' President Obama says . The White House said the deal would allow for a gradual expansion of Jewish settlements in areas that are under full Israeli control. Meetings come as hopes for renewed Israeli-Palestinian talks have dimmed .