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Prime Minister Benjamin Netanyahu and U.S. special Mideast envoy George Mitchell will meet in two weeks to reach a final agreement on settlement construction in the West Bank.

A senior political source said the four-hour meeting yesterday between Defense Minister Ehud Barak and Mitchell in New York resulted in significant progress.

"There is no crisis and there is progress," the source said. "The conditions have matured for a meeting between Netanyahu and Mitchell, and by then Israel will have to make decisions."

Netanyahu adviser Yitzhak Molcho was on hand during the first two hours of yesterday's talks. Then Mitchell and Barak discussed various issues alone.

At the end of the meeting the U.S. delegation traveled to Washington to brief President Barack Obama on developments. Barak called Netanyahu last night to update him on the details of his negotiations.

At the end of the meeting the two sides issued a joint statement in which they agreed to be restrained in their comments to the media, largely to avoid provoking opposition at home.

According to the statement, Barak and Mitchell "discussed the full range of issues related to Middle East peace and security and the contributions Israelis, Palestinians, their neighbors and the international community should make to this effort. Specifically, their discussions covered a wide range of measures needed to create a climate conducive to peace. These included measures on security and incitement by the Palestinians, steps by Arab states toward normalization with Israel, and, from Israel, actions on access and movement in the West Bank and on settlement activity. The discussions were constructive and will continue soon."

The Americans and Israelis also agreed to take a lower profile regarding statements about the settlements.

"The two sides managed to reach agreement on a number of issues, but there are still some differences that require clarification and solutions," a source close to Barak said. "The direction things are going is positive and there has been progress."

Positive atmosphere

The positive atmosphere was seconded by State Department spokesman Ian Kelly, who told the press in Washington that "discussions so far have been good and constructive."

Barak raised a series of options that he had been authorized to discuss by the prime minister, according to a source close to the defense minister.

"Barak did not present his own private plan," the source said. "Everything was done with approval. Now the government in Israel will have to make decisions."

Asked by reporters whether Israel would declare a temporary freeze on settlement building, Barak said that "I think it's a little bit too early to predict. We are considering every positive contribution Israel can make toward the taking-off of a significant important peace effort."

Barak had traveled to the United States for a meeting with Mitchell after a stormy discussion of the "forum of six" on the issue of settlements. The forum, which includes, in addition to Netanyahu and Barak, Foreign Minister Avigdor Lieberman and ministers Benny Begin, Dan Meridor and Vice Premier Moshe Ya'alon, did not agree to authorize a "temporary freeze" on settlement activity.

The scenario that received greater support was one in which construction would continue in settlements, but only in the form of adding levels to existing buildings and not by appropriating more territory.

It was not clear whether Netanyahu had instructed Barak to put forth this proposal during his meeting with Mitchell, or to advance the "temporary freeze" idea.

Meanwhile, during a briefing of European Union ambassadors in Jerusalem yesterday, Netanyahu said that every arrangement on settlements must "allow the residents to continue leading normal lives."

He said Israel would not establish new settlements or appropriate land, and would evacuate the illegal outposts.

The prime minister called on the international community to pressure the Palestinians and for the Arab states to take positive steps toward Israel.

"It was not easy for me to make the speech at Bar-Ilan [University], but the Arabs need to give us a positive answer," Netanyahu said. "I am willing to begin negotiations immediately with the Palestinians and the Arab states without preconditions."