The White House gave no details on the Bush-Fayyad meeting except that it took place at the Oval Office this week.
The US and Israel are keen to
deal with Fayyad
But spokesman Ari Fleischer said Bush was encouraging "all parties" to accept his proposed Middle East peace "roadmap".
The announcement followed reports Bush may be about to hold a summit with the Israeli and Palestinian prime ministers.
Israeli Foreign Minister Silvan Shalom told Israeli television Thursday that such a summit was possible after Bush spoke to Palestinian Prime Minister Mahmoud Abbas and his Israeli counterpart Ariel Sharon this week.
The American president and Israel have been shunning Palestinian President Yasser Arafat claiming he has failed to quell the intifada against Israeli occupation.
Shalom gave no details and did not say where or when the meeting might take place.
The New York Times quoted US administration officials this week as saying Bush may make his first trip to the Middle East as president. It said the US President may meet Abbas and Sharon in Qatar or Kuwait.
Qatar’s Foreign Minister Sheikh Hamad bin Jassem bin Jaber al-Thani met his Israeli counterpart earlier this month in Paris.
The French news agency, AFP quoted administration officials as saying Egypt may be a possible venue for Bush's meetings.
But the officials, who requested anonymity, stressed no final decision had been taken.
At a news conference earlier on Thursday in Paris, US Secretary of State Colin Powell also said it was possible in the future for Bush to hold talks with the two prime ministers.
Palestinian Security Minister Mohammad Dahlan said on Wednesday he did not think Abbas would go to Washington to meet Bush but did not discount the possibility of the meeting being held elsewhere.