Michel has been trying to get the rivals to agree on establishing the court to try suspects in the 2005 killing of Rafiq al-Hariri, a former prime minister, an issue that has polarised the country.
Lebanon's anti-Syrian faction blames Damascus for the massive truck bombing that killed al-Hariri and 22 other people and claims the Syrians are using their Lebanese allies, including Hezbollah, to undermine the formation of the tribunal.
Syria denies the accusations. The Lebanese opposition parliament speaker has stalled on convening the legislature to approve the court.
The Iranian- and Syrian-backed Hezbollah, which is leading the opposition has argued that while it is not against the court as such, it wants to first discuss the terms for establishing the tribunal.
Its followers have been camping out in downtown Beirut for months demanding Fouad Siniora, the prime minister, give the opposition a veto-wielding share in a new cabinet.
Siniora has refused to step down.
Michel told a news conference: "I reiterated my conviction that the preferred outcome would be the early establishment of the tribunal after agreement among the Lebanese parties."
He also indicated the UN would give the two sides in the divisive issue more time to resolve their differences and come up with a compromise.
An intervention by the UN Security Council imposing the court would have bypassed the Lebanese legislature, which must ratify the agreement between Beirut and the UN creating the international court.
The issue of the tribunal is at the core of a deep political crisis between the US-backed government and opposition groups backed by Syria and Iran - a conflict that has turned violent, killing nine people in recent months.
Michel capped his week-long visit on Friday with a second meeting with Siniora.
The UN envoy later said the two discussed the prospects for Lebanon "to end the impasse and establish the special tribunal for Lebanon in conformity with the Lebanese constitution".
|Siniora's Western-backed government is|
being boycotted by the opposition [EPA]
Michel said all political leaders voiced support for the tribunal in talks with him, and he urged them to follow through on their words.
Dialogue was the key to working out the differences, Michel said, adding that an agreement among the Lebanese would create "favourable conditions" for the work of the tribunal, once it's established.
Michel, who is to report to Ban Ki-moon, UN secretary-general, on his return to New York, denied media claims that the UN has given the Lebanese a few weeks to agree or face UN intervention.
He said, however, that serious actions and goodwill were necessary to get things moving.