Israeli and Palestinian officials met for direct talks for the first time in three years Monday, with the United States urging both sides to make the tough compromises needed to reach a peace deal.

In a symbolic message of peace and tolerance, Israeli chief negotiator Tzipi Livni and her Palestinian counterpart Saeb Erakat sat down side-by-side opposite US top diplomat John Kerry to share a traditional Muslim itfar meal just after sunset.

“It was a constructive and productive meeting between the parties. They engaged in good faith and with seriousness of purpose,” a senior state department official said in a statement, after the dinner lasting about 90 minutes.

“We are looking forward to continuing the talks tomorrow morning.”

In the elegant Thomas Jefferson room at the state department, Kerry had welcomed the two teams to the flower-bedecked table for a dinner of grilled Atlantic grouper and apricot upside down cake, hailing the moment as “very, very special.”

“There’s not very much to talk about at all,” Jefferson joked, seeking to break the ice at a landmark moment that many hope may help lead to a long sought after breakthrough in the deadlocked peace process.

The new US secretary of state, who has staked much of his reputation on bringing both sides back to the talks, will also host a three-way meeting on Tuesday, before making a statement to reporters around 11.00 am (1500 GMT) accompanied by the two negotiators.

Kerry was flanked at the dinner by seasoned diplomat Martin Indyk whom he named earlier as the US special envoy to the talks, and by White House Middle East advisory Phil Gordon on the other.

President Barack Obama has welcomed the start of the talks, calling it a “promising step” forward but warning of “hard choices.”

“The most difficult work of these negotiations is ahead, and I am hopeful that both the Israelis and Palestinians will approach these talks in good faith,” Obama said.

Obama promised the United States was ready to support both sides “with the goal of achieving two states, living side by side in peace and security.”

Kerry also warned earlier that many difficult choices lie ahead for the negotiators and for the leaders as we seek reasonable compromises on tough, complicated, emotional and symbolic issues.

“I think reasonable compromise has to be a keystone of all of this effort.”

The two sides have agreed to continue talking for at least nine months, a state department official said, cautioning though that this was not a deadline.

Indyk, 62, who has twice served as US ambassador to Israel and participated in the failed 2000 Camp David summit under then president Bill Clinton, said he was taking on “a daunting and humbling” challenge.

But he insisted: “It has been my conviction for 40 years that peace is possible.”

The last direct talks collapsed in September 2010 amid continued Israeli settlement building.

Israel and the Palestinians remain deeply divided over so-called “final status issues” — including the fate of Jerusalem, claimed by both as a capital, the right of return for Palestinian refugees, and the borders of a future Palestinian state complicated by dozens of Jewish settlements scattered across the occupied West Bank.

Livni, speaking earlier after meeting UN chief Ban Ki-moon in New York, said the path ahead was “going to be very tough and problematic.”

“The meeting is to define what will come next in the negotiations,” senior Palestinian official Hanan Ashrawi told AFP.

“There must be a timeline and commitment from both sides on what they’ll agree about. We hope for something good.”

As a first step, Israel said Sunday it would release 104 Palestinians imprisoned before the 1993 Oslo accords — some of whom are said to have been involved in attacks on Israelis.

State department spokeswoman Jen Psaki said the US welcomed the vote by the Israeli cabinet to agree to the prisoner release as a “positive step forward.”

Erakat also welcomed the Israeli move.

“We consider this an important step, and hope to be able to seize the opportunity provided by the American administration’s efforts,” Erakat told AFP.

But Israeli media on Monday lashed out at the decision.

“The murderers will go free,” thundered the front page headline in the top-selling daily Yediot Aharonot.