JERUSALEM U.S. envoy George Mitchell and Israeli Prime Minister Benjamin Netanyahu could not agree on a Jewish settlement freeze in talks Tuesday but said negotiations were advancing.
"We are making progress," Netanyahu told reporters.
"I think we held a very important and productive talk and we will continue with the effort which, I believe, in the end will succeed in advancing peace and security between us and our Palestinian neighbors and the region in general."
After more than two hours of talks with Netanyahu, Mitchell told reporters: "We have made good progress."
Mitchell said he looked forward to continuing discussions with Netanyahu and moving toward a "comprehensive peace" envisioned by U.S. President Barack Obama. He did not say when he would next meet the Israeli leader.
Obama's demand, in line with a 2003 peace plan, to freeze Israeli settlement in the occupied West Bank and Arab East Jerusalem has met stiff resistance from Netanyahu, the most serious rift in U.S.-Israeli relations in a decade.
Neither Mitchell nor Netanyahu, who in his public comments has played down the dispute with Washington, mentioned settlements in their public remarks.
Palestinian President Mahmoud Abbas has said peace talks with Israel, suspended since late last year, could not resume unless Netanyahu stopped all settlement activity.
Israeli Defense Minister Ehud Barak has publicly raised the possibility of a deal under which Israel would halt construction in settlements but complete projects under way in return for steps by Arab countries to normalize relations with Israel.
Arab moves toward commercial or diplomatic ties with Israel could help Netanyahu persuade partners in his right-leaning coalition to accept a compromise on settlements.
But there has been little indication Arab countries in the region would make such gestures without a settlement freeze.
At a meeting in the West Bank Monday, Mitchell informed Abbas there was "still a gap between us and the Israelis on the settlements issue," a Palestinian official told Reuters.
After seeing Mitchell, Netanyahu visited the Israeli-controlled Allenby Bridge crossing between the West Bank and Jordan. He has ordered its opening hours to be extended to ease the movement of Palestinian commercial goods.
"We are not waiting, we are doing. We are opening roadblocks, we are opening ties, we are opening the roads to peace," Netanyahu told reporters.
Separately, the Israeli leader called on Palestinians in the Gaza Strip to topple Islamist Hamas rule there. Some 1,400 Palestinians and 14 Israelis died in fighting during an Israeli offensive in Gaza this year.
Netanyahu said Hamas was "not endearing itself to the Palestinians in Gaza," Israeli media reported. "Were it possible for them (Palestinians) to cast off the regime they would do so, and I tell you, they will someday be capable of doing so," he added, the reports said.
Mitchell has praised Israel for removing some of its military checkpoints in the West Bank in a declared bid to bolster the Western-backed Abbas and the Palestinian economy. But Palestinian chief negotiator Saeb Erekat said Monday that moving a "handful" of roadblocks changed little.
Netanyahu is to hold talks Wednesday with U.S. national security adviser Jim Jones and other Middle East specialists sent to the region by the White House.
(Editing by Douglas Hamilton and Jon Boyle)
(For blogs and links on Israeli politics and other Israeli and Palestinian news, go to blogs.reuters.com/axismundi)