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Israel and the United States failed Tuesday to reach a compromise on the contentious issue of West Bank settlement construction.

Prime Minister Benjamin Netanyahu met for two hours in Jerusalem with U.S. President Barack Obama's special envoy to the Middle East, George Mitchell. The meeting ended with no results.

The prime minister's bureau released a statement to the press describing the sit-down as "good." The two men will resume their discussions in Netanyahu's office Thursday morning.

The inability to strike a final deal thus forces Mitchell to extend his stay in Israel. The envoy has been engaged in intensive efforts to wrest an Israeli commitment to halt settlement construction in time for next week's United Nations General Assembly meeting.

Washington would like to arrange a tripartite summit meeting between Obama, Netanyahu, and Palestinian President Mahmoud Abbas. The Palestinians have been adamant in demanding an Israeli settlement freeze as a precondition for the resumption of peace negotiations.

At the start of the meeting, envoy George Mitchell told the premier that he is hopeful the U.S. and Israel can reach agreement on the future of settlement construction in the West Bank.

"We hope to bring this phase of our discussions to early conclusion and to move forward in our common search for a comprehensive peace in the region," Mitchell told reporters at the start of the meeting, indicating he hoped to wrap up a deal.

Understandings between the U.S. and Israel on the issue would pave the way for peace negotiations between Israel and the Palestinians, Mitchell told Netanyahu.

In addition, Mitchell said he is hopeful that Netanyahu, Obama, and Palestinian President Mahmoud Abbas will jointly meet on the sidelines of the United Nations General Assembly in New York later this month.

The Palestinians are demanding a complete freeze on settlement construction as a precondition to peace talks with Israel.

Netanyahu is willing to approve only a partial construction freeze for a period less than the year the Americans are demanding. It is believed that the two sides will compromise on a nine-month hiatus in construction.

Following his meeting with Netanyahu, Mitchell will travel to Ramallah for a meeting with Abbas.

In recent weeks, senior American officials relayed messages to Israel asking that it soften its stance on the settlements and offer the Palestinians an opportunity to retreat from their hardline position on the possibility of a tripartite meeting at the UN.

Netanyahu, who met with the Knesset Foreign Affairs and Defense Committee Sunday, said that a tripartite meeting at the UN is not a certainty.

"Nothing has been agreed regarding a meeting with Abu Mazen," the prime minister told the MKs.

Earlier this week, Netanyahu commented on the impending meeting with Mitchell during a conference with Likud cabinet members. Netanyahu was asked if Israel had agreed to a two-year timeline for negotiations and the prime minister responded that the U.S. administration had undertaken not to spring policy surprises on Jerusalem.

"In any case, I will not agree to enter into talks whose results are defined and known in advance," Netanyahu told his party. "That's what negotiations are for and we are willing to begin right away."

In discussing the talks with the United States on freezing construction in the settlements, Netanyahu stressed that the agreement is only about "cutting down the construction" and said that it was still uncertain how long the restrictions would apply.

Netanyahu said that the agreement includes the continued construction of 2,500 housing units on which work has already begun, and 450 new housing units in the large settlement blocs. Netanyahu also said that public structures will be allowed, including schools, synagogues and more.

The prime minister also blamed the Palestinians for delaying the resumption of negotiations and accused them of "hardening their positions."

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