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Prime Minister Benjamin Netanyahu and U.S. Secretary of State Hillary Clinton meeting at a peace summit in Sharm el-Sheikh on September 14, 2010. Photo by AP
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Prime Minister Benjamin Netanyahu said Wednesday that Israel and the United States had mutual understandings that surpassed their differences, in an apparent attempt to defuse a recent row over Israeli plans to construct more homes in East Jerusalem and the West Bank.

Netanyahu told reporters before his meeting with former U.S. statesman Henry Kissinger in New York that he would discuss with Secretary of State Hillary Clinton on Thursday ways to jump start the Middle East peace process again.

"We have broad understandings with the United States on this issue and many others that surmount the disagreements over other matters," he said.

He added that his goal was to reach a peace agreement based on broad understandings with the Palestinians and other willing Arab states.

Earlier Wednesday, Clinton told reporters in a joint video conference with Palestinian Prime Minister Salam Fayyad that a peace deal in the Middle East was still possible and necessary.

She said that Israel's recently announced plan to construct 1,300 homes in East Jerusalem and 800 more in the West Bank settlement of Ariel was counterproductive to the peace process, but added that the United States was continuing to work to resume the stalled negotiations.

"This announcement was counterproductive to our efforts to resume negotiations between the parties," Clinton told reporters, but said: "We still believe that a positive outcome is both possible and necessary."

When asked what she would tell Netanyahu during their meeting the following day, Clinton responded: "I believe strongly that negotiations are the only means by which the parties will be able to conclude an agreement that will lead to a Palestinian state and Israel living in security with its neighbors. That is our view. That is our commitment."

"I remain convinced that both Prime Minister Netanyahu and President [Mahmoud] Abbas want to realize the two-state solution," Clinton added. "Like any very difficult political challenge, it is often hard to find the path forward. But we are absolutely committed to doing everything we can to assist the parties in doing so.‬"

U.S. President Barack Obama said Tuesday, a day after the move was announced, that such plans were "never helpful". The State Department earlier said Washington was "deeply disappointed" by the plans, which were revealed at the start of Netanyahu's visit to the U.S.