US envoy meets Israeli PM in Mideast peace drive

US envoy George Mitchell met Israeli Prime Minister Benjamin Netanyahu today to try to push all players in the Middle East to take steps towards comprehensive regional peace.

The former US senator said he and Netanyahu made "good progress" in their nearly three-hour meeting that focused on the thorny issue of Israel's settlement activity in the occupied West Bank.

"We look forward to continuing our discussions to reach a point that we can all move forward to reach a comprehensive peace," Mitchell told reporters.

The hawkish premier's refusal to heed Washington's repeated demands that Israel halt all settlement activity on occupied Palestinian land led to a rare public row that raised tensions between the two close allies to levels not seen in years.

Both sides have in recent weeks sought to lower the flames, but Palestinians are refusing to revive the stalled peace negotiations until Israel halts the settlement building.

Netanyahu said the two sides were making progress "towards achieving the understanding that will enable us to continue and complete the peace process established between us and Palestinian neighbours and the countries in the entire region."

The two agreed to meet again in August, Israeli public radio reported. Israeli media have said a compromise is close under which Israel would agree to a temporary settlement freeze but would continue some projects already underway.

Today's meeting was part of Mitchell's whistlestop tour of the region in which he has held talks with leaders of Syria, Egypt and the Palestinians in four days.