Advise electric guitar!

You should definitely learn on a normal guitar first to get the chords and everything..And make sure you can actually play it.

170$ is really cheap for a guitar.
You can buy a value package that brings all the necessary stuff but it won't be as good as buying a separate guitar and amp.

I suggest getting a steel acoustic to toughen up your fingers first, so that electric will be a breeze.

Otherwise, starting with electric, you might find it hard to play on an acoustic. Just my two cents.

Buy an acoustic guitar first and see if this is your thing. If you're serious about learning, then I'd advise beginners to learn classical musics at first before moving on to the more modern songs. Classical music chords are really helpful for beginners to learn about finger placements and music rhythms.

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Just buy any old guitar. If you don't give up after a year or so, then start considering a "real" guitar.

Also, I'd advice you to buy an acoustic. if not instead of an electric guitar, then together with one. It's annoying having to lug around an amp up and/or put headphones on whenever you want to play something.
It will make the logistics of a practice session much less of a headache, and you can bring you guitar with you wherever you go, wether it's the in the kitchen or to the moon, a change in enviroment for your playing and practice makes a hell of a diffirence, trust me.

That is the best advice I can think of. Good luck! :)

In case you missed this thread earlier, I did a giant info-dump post there.

Some advice from someone who's been playing for 20+ years: Get an electric. The reason I say this? An acoustic is harder to play and learn on. Yes, you may build up finger strength etc. faster by playing it but it also may discourage you from continuing to play. It just isn't as much fun. I learned on an acoustic and saved up for my own electric and haven't looked back since. I currently own 4 electrics and 3 acoustics but I play the electrics more than anything. You can also get these: GripMaster to help build up finger strength. I still use mine!
Do you have a PS3 or an XBox 360? Buy yourself the Rocksmith Guitar Bundle. You pay Very little extra for a great guitar (Epiphone Les Paul Junior), it comes with everything you need and it is a GREAT teaching tool, especially for beginners.
As for amps, with Rocksmith you can use your console through the game as an amp. You can also get mini amps Marshall Micro that will suit your needs for the time being so you don't spend too much before deciding whether you want to continue with this.

I'd buy a cheap classic acoustic to begin with.

What currency are you working in?

I see a lot of "start on acoustic" etc suggestions.
When it comes to the start (beginners), it really doesn't matter. You can play nice clean sound on an electric guitar (so you can clearly hear what you are playing and spot mistakes that are usually lost in distortion). Theory is the same. You play the same chords, same notes. So it is completely up to you whether you start on electric or acoustic.
BUT
If you have never ever played a guitar then I would strongly suggest acoustic for one reason. It is cheaper. I've seen too many people to grab starting electric guitar set, played that couple times and then give up after a few weeks/months. Or if your friends play guitars you can borrow it and check it out.
Here are two scenarios that often happen (from my experience):
First, you buy cheap acoustic guitar (let's say $30). You will play it for 4 months (when it comes to the aspect of time it is more related to how many hours a day you will play). Then two things can happen: you won't like it. Not a problem, you will probably be able to sell that guitar for a half the price. OR you will fall in love and save/buy electric guitar.
Second, you buy cheap ($170) electric guitar. You have to keep in mind you need an amplifier and cable. To buy all these things your budged is very low. Basically you will buy shitty set. Now again two things can happen: you won't like it. Not a problem, you will probably be able to sell that guitar for a half the price (but now you will lose quite a lot of money). OR you will fall in love BUT you won't like the quality of that cheap electric guitar set (this I can guarantee, unless you are completely deaf).

As you can see the question is not whether to start on electric or acoustic guitar (you can play amazing things on both) but rather Will you stick with it? Will you be happy with really shitty electric set for $170?

*I haven't included pros and cons of mobility and loudness. I think those are pretty clear differences.

I learned on an acoustic and usually don't play electric but I recently grabbed this one to jam with friends away from the house: http://www.guitarcenter.com/Epiphone-SG-Special-Electric-Guitar-101392124-i1149250.gc

Great action and sound. Cheap enough to bring out and around. Would be an awesome starter electric for your needs!

I started with a Squier Affinity Stratocaster. It's not the best guitar in the world but it's definitely good value for money. It plays nicely and it's cheap, unlike a lot of the guitars you get in those starter pack things. Around £140 I think.