Ian Kelly, a spokesman for the US state department, said he had spoken to one of Mitchell's aides and had learned that the talks had "been good and constructive".

The talks followed an appeal by Barack Obama, the US president, that Israel stop building settlement blocs in an attempt to kick-start Israeli-Palestinian peace talks.

'Compromise possible'

The US state department said on Monday that it had not ruled out the possibility of a compromise with Israel on a settlement freeze.

That came after reports that Israel was considering a freeze on new settlement construction for three months.

"We've been working with all the parties to try and come up with... an environment conducive to the resumption of negotiations," Kelly said on Monday.

Yediot Aharonot, an Israeli daily newspaper, reported that any freeze under consideration by Binyamin Netanyahu, the Israeli prime minister, would not include thousands of settlement buildings already under construction in the West Bank, nor would it include any construction projects in East Jerusalem.

The Fatah-led Palestinian Authority (PA), the administration which has been involved in the stalled peace talks with Israel, has condemned its settlement expansion policy.

They have called the programme by the Jewish state a method to create permanent 'facts on the ground' that illegally take land needed by the Palestinians to form a functioning nation-state in the future.