By Matt Spetalnick

NEW YORK, Sept 24 (Reuters) - President George W. Bush held talks with Palestinian President Mahmoud Abbas and Middle East envoy Tony Blair on Monday seeking to build momentum for a Israeli-Palestinian peace conference.

On the eve of the U.N. General Assembly, Bush renewed support for the creation of a Palestinian state, underscoring U.S. efforts to bolster the moderate Abbas against Hamas militants who control the Gaza Strip.

"I believe that the vision (of Israel and a Palestinian state) side by side in peace is achievable," Bush said as he sat with Abbas in a New York hotel. "We're going to help you realize that goal."

Abbas voiced support for Bush's plan to sponsor a Middle East conference in November to try to revive a long-stalled peace process and push forward on Palestinian aspirations for independence. "We feel a sense of hope," Abbas said.

But the agenda remains up in the air, the list of attendees is uncertain and skepticism runs deep among Arab diplomats over whether Bush is truly committed to resuming the United States' traditional role in Middle East peacemaking.

Critics have accused him of neglecting the Israeli-Palestinian conflict while waging the unpopular Iraq war.

Following the Abbas meeting, Bush sat down with Blair for their first face-to-face talks since the former British prime minister was named Middle East representative for the "Quartet" of international mediators in June.

Bush was instrumental in getting the Quartet -- the United States, Russia, the United Nations and the European Union -- to appoint Blair, his old ally from the Iraq war.

LITTLE PROGRESS FROM RICE'S VISIT

Bush's talks followed Secretary of State Condoleezza Rice's visit to the Middle East last week in which she made little headway in narrowing differences between Israel and the Palestinians over the conference's agenda.

Meeting Bush along with Palestinian Prime Minister Salam Fayyad, Abbas made clear his position on Monday, saying the conference must deal with "issues of substance" that will lead to negotiations on a permanent status peace deal with Israel.

The Israelis, however, just want the conference to yield basic set of principles for future negotiations.

Bush has sought to nurture Israeli contacts with him since Hamas seized control of Gaza in June. Abbas dismissed the Hamas-led government but now controls only the West Bank.

The United States signaled on Sunday it intends to invite Saudi Arabia and Syria, among other Arab countries, to the conference.

Rice said she regarded the members of an Arab League panel comprised of Syria, Lebanon, Qatar, Saudi Arabia, Jordan and Egypt as "natural invitees." Only the last two have full relations with Israel.

The conference would be the first of its kind since Madrid in 1991, but most analysts see little chance for a breakthrough.

Bush, saddled with low approval ratings, has only 16 months left in office. Abbas has been weakened by Hamas' takeover of Gaza. Israeli Prime Minister Ehud Olmert's standing at home has been hurt by criticism of his handling of last year's Israel-Hezbollah war. (Additional reporting by Tabassum Zakaria)

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