Prime Minister Benjamin Netanyahu told U.S. special envoy George Mitchell yesterday that he is willing to discuss the core issues of the Israel-Palestinian conflict, namely Jerusalem, borders and security arrangements, as part of the proximity talks with the Palestinian Authority. The prime minister told Mitchell that as part of the indirect talks he would be open to a "frank exchange of views," regarding the core issues.

Senior officials in the Obama administration expressed satisfaction with the results of Mitchell's visit to Israel, which ended yesterday.

"We are very encouraged following the visit regarding the likelihood of progress in the peace process," the officials said.

The U.S. envoy will return to the region next week for more meetings with PA President Mahmoud Abbas and Netanyahu. Mitchell met with Netanyahu for a breakfast meeting, after which the prime minister told his cabinet that "Israel wants to immediately begin the peace process. The United States wants to begin the peace process immediately. I can only hope that the Palestinians will also begin the peace process immediately. We will know in the coming days if the process will begin. I hope that it does."

Until Mitchell returns to the region, his deputy, David Hale, will continue holding talks between the two sides.

Officials in Jerusalem are hoping that the visit of the Palestinian leader to Washington in a week, after the May 1 Arab League summit, will lead to a resumption of proximity talks between Israel and the Palestinian Authority.

A source close to Netanyahu noted yesterday that the Palestinians want the renewed approval of the Arab League before agreeing to hold talks with Israel. On the basis of the information available, such approval is very likely to be given, the source said.

Palestinian Authority President Mahmoud Abbas was invited by U.S. President Barack Obama to visit Washington next month, according to the head of the Palestinian negotiating team, Saeb Erekat.

Erekat said that the invitation was relayed by Mitchell on Friday in Ramallah.

Palestinian sources said that Mitchell is still expected to deliver clarification regarding the position of the Israeli side on the negotiations, and only after these will the PA seek the support of the Arab League on restarting the proximity talks.

Nonetheless, the dominant view in the PA is that the Palestinians will seek the resumption of the proximity talks within two weeks so that they will avoid being seen as not wishing to pursue peace - especially after Obama also failed at gaining a freeze on construction in East Jerusalem.