By Patrick Anidjar

JERUSALEM, Nov 05, 2008 (AFP) - Israeli and Palestinian leaders on Wednesday voiced hopes Barack Obama would help speed up the slow-moving Middle East process once he moves into the White House.

Outgoing Prime Minister Ehud Olmert also expressed confidence Israel's ties with its strongest ally would remain as strong as ever under an Obama administration.

"Israel and the United States both desire to maintain and strengthen these relations and promote peace and stability in the Middle East," said Olmert, who has stepped down but will remain at the head of a caretaker government until after Israeli elections scheduled for February 10.

Foreign Minister Tzipi Livni, a frontrunner to take over from Olmert as prime minister, recalled Obama's July visit to Israel, saying it left residents with the feeling that "he is a man who is deeply committed to Israel's security and peace."

Palestinian president Mahmud Abbas for his part expressed hope Obama would help "speed up efforts to achieve peace, particularly since a resolution of the Palestinian problem and the Israeli-Arab conflict is key to world peace."

The United States played a key role in reviving the peace talks last year, after a seven year hiatus, but little tangible progress has been achieved since the November 2007 conference President George W. Bush hosted in Annapolis, Maryland.

Olmert's resignation over a string of scandals has further affected the peace process, and even some cabinet ministers have said the current caretaker government has insufficient powers to take part in negotiations.

Right-wing opposition leader Benjamin Netanyahu, Livni's leading electoral rival, expressed conviction in a message to Obama that: "We will work together towards peace in our region and a better future for all of us."

Sylvan Shalom, an MP in Netanyahu's Likud party and a former foreign minister, pointed out his party had "excellent relations with the Democratic administration of President Bill Clinton -- we pursued the peace process at the time -- and there is no reason there should be no such relations with an Obama administration."

Sallai Meridor, Israel's ambassador to Washington, told Israeli army radio he expected "easy cooperation" with Obama, saying the president-elect had "extraordinary abilities to listen, understand and analyse."

Obama gained strong sympathies in Israel and stirred anger among Palestinians when he proclaimed in June that "Jerusalem will remain the capital of Israel and it must remain undivided."

He later said that the city's status must be agreed in negotiations between Israel and the Palestinians.

The international community, including the United States, does not recognise Israel's claim that Jerusalem is its "eternal, undivided capital." Israel occupied mainly Arab east Jerusalem and the Old City during war in June 1967.

Jerusalem remains one of the most contentious issues in the peace talks between Israel and the Palestinians, who wish to make it the capital of their future state.

"We want him to support the Palestinian cause or at least not to be biased towards the Israeli occupation," said Fawzi Barhum a spokesman for Hamas, the Islamist movement which has ruled the Gaza Strip since ousting forces loyal to the secular Abbas in June 2007.

"We would have no problem establishing normal relations with the United States to explain our just cause," he said. The United States, like the European Union and Israel, lists Hamas as a terrorist organisation.

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