Israel says there are differences with U.S. over peace talks

JERUSALEM -- Israeli Prime Minister Benjamin Netanyahu, speaking before a key meeting with the White House Mideast envoy, said Sunday that differences remain with the U.S. over resuming peacemaking with the Palestinians.

Netanyahu delivered the assessment before flying to Cairo for talks with Egypt's president, a main mediator in efforts to restart peace talks, and ahead of a meeting with George Mitchell, the U.S. envoy, later this week.

The Obama administration, with Mitchell as the point man, has been pressing Israel to declare a halt to construction in its West Bank settlements. Palestinians claim the West Bank as part of their future state and say they will not resume peace talks without a settlement freeze.

The meeting with Mitchell had been scheduled for Monday, but Netanyahu's office said the talks were postponed to Tuesday to allow the Israeli leader to attend the funeral of an air force pilot killed in a training accident. The pilot, Capt. Asaf Ramon, was the son of Israeli astronaut Ilan Ramon, who died in the Columbia shuttle disaster in 2003.

Netanyahu, whose Likud Party is ideologically committed to expanding settlements and holding on to the West Bank, has been bargaining for a compromise that would allow some building to continue.

Navigating a thin line between the conflicting demands of his supporters at home on the one hand, and the U.S. and Palestinians on the other, Netanyahu and his government last week approved construction of several hundred new apartments in West Bank settlements and several hundred more in a Jewish neighborhood in east Jerusalem.

At the same time, his office indicated openness to a limited freeze. Media reports say Israel might agree to halt construction for nine months, but would insist on completing the 2,500 to 3,000 housing units already begun.

Speaking at the beginning of Israel's weekly Cabinet session, Netanyahu held out hope for a deal with Mitchell.

"There is still work to do," he said. "I hope that we will succeed in reducing the gaps. Maybe we will bridge them, so that we can move the process forward."

Mitchell delivered a similar message Sunday.

"While we have not yet reached agreement on any outstanding issues, we are working hard to do so, and indeed the purpose of my visit here this week is to attempt to do so," he told Israel's ceremonial president, Shimon Peres.

In Egypt, Netanyahu and Mubarak met over a traditional meal breaking the Muslim Ramadan fast. Mubarak asked Netanyahu to halt Israeli construction in the West Bank and in east Jerusalem, to lift restrictions on Palestinians and to quickly resume peace talks, Mubarak spokesman Suleiman Awad told the state-run MENA news agency.

A statement from Netanyahu's office said "all sides -- Israel, the Palestinians, Arab nations and the international community -- must do their part in advancing the peace process," an apparent reference to gestures the Arab world might offer in exchange for a settlement freeze.

Netanyahu also discussed Egypt's attempts to mediate a prisoner swap between Israel and the Hamas militant group, the statement said. Hamas, which controls the Gaza Strip, is demanding hundreds of Palestinian prisoners in exchange for an Israeli soldier captured more than three years ago.