United States Mideast envoy George Mitchell said on Friday the new U.S. administration's push for Israeli-Palestinian peace after the war in the Gaza Strip faced substantial hurdles, and he predicted further setbacks.

The somber assessment by former U.S. Senator George Mitchell followed two days of talks with Israeli and Palestinian leaders about shoring up a shaky cease-fire that ended Israel's 22-day offensive on Gaza.

Mitchell said consolidating the truce and "addressing immediately the humanitarian needs" of Gaza's 1.5 million residents were the Obama administration's priorities.

"Then we must move forward," he added, apparently referring to stalled peace talks that have now been derailed by the war.

Earlier on Friday, Mitchell told Likud Chair Benjamin Netanyahu he plans to return to Israel shortly after February's general elections.

During their meeting, Netanyahu stressed the need to counter Iran's "negative influence" in the region, in order to advance talks with the Palestinian Authority.

Netanyahu added that if elected prime minister, he would continue peace talks with the Palestinians, but said that Israel's security interests would "take precedence."

On Wednesday, Prime Minister Ehud Olmert, Defense Minister Ehud Barak and Foreign Minister Tzipi Livni told the visiting Mitchell that Israel would respond to every Hamas violation of the cease-fire, be they rocket attacks, strikes along the border fence or smuggling through tunnels.

Mitchell told Israeli officials that the new administration was committed to Israel's security, to the road map, and to the 2004 letter by president George W. Bush stating Palestinian refugees would not return to Israel and the border between Israel and the Palestinian Authority would take into consideration facts on the ground, meaning large settlement blocs would remain in Israeli hands.

A government source in Jerusalem said Wednesday that it was understood during talks with Mitchell that President Barack Obama expects Israel and the Palestinian Authority to renew diplomatic talks right after elections here.

The source also said that according to Mitchell, the American administration is, "very serious about the Palestinian issue," and wants to "accelerate the process" as much as possible. Olmert told Mitchell that Gaza border crossings will not open permanently for the passage of goods unless a deal is reached on kidnapped soldier Gilad Shalit. However, Olmert said Israel would continue opening the crossings for humanitarian aid.

In a brief statement to the press, Mitchell said consolidating the Gaza cease-fire was "of critical importance," and called for an end to the hostilities and smuggling and to open the crossings on the basis of the 2005 agreements. Olmert told Mitchell that the stability of the cease-fire in Gaza would be determined by two parameters: A complete cessation of Qassam rockets and attacks along the fence and an end to arms smuggling by Hamas.

"It is important that following the operation in Gaza, Hamas' strength will decline and the Palestinian Authority will get a foot in the door in Gaza," Olmert said. Mitchell also met with President Shimon Peres, who said there was no contradiction between the positions of the United States and Israel. "Like the United States, Israel wants peace," he said. "They say the administration will pressure Israel but we are actually the ones who will pressure the United States to assist us in bringing peace and fighting terror."