(Updates throughout)

By Axel Bugge and Sue Pleming

LISBON, July 19 (Reuters) - The Quartet of Middle East mediators gathers for the first time with Tony Blair as special envoy on Thursday at a meeting expected to focus on a U.S. push to revive Israeli-Palestinian peace moves.

The Quartet meeting will be the first since Hamas Islamists seized control of the Gaza Strip from U.S.-backed President Mahmoud Abbas's forces last month and since the former British prime minister was named as its envoy.

The group, including the United States, Russia, the European Union and the United Nations, is expected to endorse U.S. efforts to restart long-frozen negotiations between Israel and the Palestinians on ending decades of conflict.

U.S. President George W. Bush announced this week he intends to hold a Middle East peace conference in the autumn.

"Bush's announcement will surely influence the dynamics of the meeting in Lisbon," said Portuguese Foreign Minister Luis Amado, whose country currently holds the rotating EU presidency and is hosting the meeting.

"I think the Quartet meeting could give a new impulse to the peace process in the Middle East."

It is years since Israel and the Palestinians last discussed issues at the root of the conflict -- final borders of a Palestinian state, the return of refugees and the status of Jerusalem.

U.S. Secretary of State Condoleezza Rice said the United States would keep leading Middle East peace efforts with Blair playing a "completely complementary" role as Quartet envoy.

She made clear she saw her role as dealing with the political issues.

COMPLEMENTARY ROLE FOR BLAIR

"There is also a political track that for a variety of reasons the United States is committed to lead in coordination with the Quartet," she told reporters travelling with her to Lisbon.

Blair's duties have been defined by the Quartet as raising funds for the Palestinians, building their ruling institutions and promoting their economic development, but diplomats have told Reuters he seeks more direct involvement in peacemaking.

"Blair is a strong political figure recognised by everyone," said Amado. "Blair's work is instrumental, in which he needs to create the conditions to contribute to state-building on the Palestinian side."

Blair was urged by the head of the main U.N. aid agency for the Palestinians to work to ease an effective trade embargo on Gaza. Karen AbuZayd of the United Nations Relief and Works Agency said Gaza's economic crisis there could reach the point where nearly all its 1.5 million people depend on food aid.

Aid agency Oxfam International made a similar plea.

Since Hamas took over Gaza, the West has sought to bolster Abbas, who said on Wednesday he would order early parliamentary and presidential elections after what he described as a Hamas "coup" in Gaza. Hamas won parliamentary elections last year.

On Monday, Blair will visit Israel and the West Bank, where Abbas's Fatah is in control. It will be his first visit since he became the Quartet's envoy on the day he stepped down as prime minister after 10 years in power.

Israeli Prime Minister Ehud Olmert met Abbas this week but Israel again ruled out negotiations for now on the borders of a future Palestinian state. To help Abbas, Israel decided to release 256 Palestinian prisoners.

The Quartet last met in Germany on May 30. Portugal has now assumed the six-month rotating presidency of the EU.

(Additional reporting by Henrique Almeida)

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