WASHINGTON -- U.S. Secretary of State Hillary Rodham Clinton is shepherding Mideast talks this week that she says may be the last chance for peace between Israelis and Palestinians.

Clinton and former Sen. George Mitchell, President Obama's special envoy to the region, planned to be in the Red Sea resort of Sharm el-Sheik, Egypt, for talks Tuesday with Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas.

They were scheduled to shift to Jerusalem for a second day of talks Wednesday.

The most immediate obstacle for negotiators is a Palestinian demand that Israel extend a curb on new housing construction in the West Bank -- a constraint that Israel says will expire Sept. 26.

Obama said Friday that he has urged the Israeli leader to extend the partial moratorium as long as talks are making progress. Obama also said he's told Abbas that if he shows he's serious about negotiating, it will give political maneuver room for Netanyahu to take the domestically unpopular step of extending the limits on settlements.

Abbas knows "the window for creating a Palestinian state is closing," Obama said.

Clinton's task, he said, is to get the Israeli and Palestinian leaders to "start thinking about how can they help the other succeed, as opposed to how do they figure out a way for the other to fail."