"Our policy in Jerusalem will not change. It's not just my policy, it's the policy of all my predecessors since 1967."
Although Netanyahu was reiterating a long-standing position, the timing of his comments threatened to undermine Mitchell's visit.
Mitchell's efforts in the region had been on hold due to disagreements with Israel over settlement construction in East Jerusalem, the area of the city that Palestinians want as the capital of a future state.
The Palestinians refused to take part in indirect peace talks with Israel, mediated by the US, in March after Israel announced plans to build 1,600 settlements on occupied Palestinian land.
The move also caused a rift with the US as the announcement came during a visit to Israel by Joe Biden, the US vice-president.
Israel's Haaretz newspaper reported on Fridaythat Israeli and US officials were attempting to reach an understanding on a joint approach to the peace process in a bid to defuse the recent tensions.
It said Netanyahu is considering an interim agreement that would include the establishment of a Palestinian state in the West Bank within temporary borders as a possible way to unfreeze the stalled talks with the Palestinians.
Akiva Eldar, the chief political correspondent of Haaretz in Tel Aviv, said Mitchell's visit indicates that Netanyahu is willing to move forward with proximity talks that will eventually lead to direct negotiations.
"It doesn't mean that Netanyahu will not repeat the usual rhetoric - that 'We have the right to build in East Jerusalem as we have the right to build in Tel Aviv'," he told Al Jazeera.
"He has to pay lip service to his partners in the coalition from his own party Likud and from the extreme right."
'Status quo unsustainable'
Eldar said Netanyahu will also not necessarily agree to the establishment of a Palestinian state within temporary borders any time soon.
"This is a long shot. First, he will try to negotiate the Americans to death on the parameters of the negotiations before we even start the proximity talks.
"The most important thing is, where do we start? The Palestinians and Americans expect the Israelis to start where [former Israeli] Prime Minister Olmert left off in 2008. But Netanyahu says he has no commitment to the offers that were made by his predecessors."
In Washington, the US state department said it decided late on Wednesday to send Mitchell to the region after lower-level officials had meetings with Israeli and Palestinian representatives.
It said the visit is part of efforts to create an atmosphere to move the peace process forward.
"We don't go to meet just to meet. We go there because we have some indication that both sides are willing to engage seriously on the issues," Philip Crowley, a state department spokesman, said.
"We understand that the Israelis have a long-standing position.But as [Hillary Clinton, the US secretary of state] has said repeatedly ... the status quo is not sustainable.
"Have they done everything that we'd like to see them do? No. But this is why we're continuing this conversation."
Mitchell is scheduled to meet separately with Netanyahu and Mahmoud Abbas, the Palestinian president, during his visit.
Saeb Erekat, the chief Palestinian negotiator, voiced support for those efforts on Thursday, saying he believed "President Obama and Senator Mitchell must be given a chance" to break the deadlock between the two sides.
But he said this could only happen if the US is able to convince the Israeli government to "give peace a chance".
"I really hope the Israeli government will opt to refrain from any provocative actions.
"We hope [Mitchell] will have the right formula for resuming proximity talks by having Israel stop settlement activities."
However, Barack Obama, the US president, recently issued a pessimistic assessmentof the prospects for peace, saying that his country could not force its will on the Israelis and Palestinians if they were not interested in making compromises.
Despite shuttle diplomacy and unusual pressure on Israel, the Obama administration has been unable to reach the goal of reviving talks between Israel and the Palestinians.
Negotiations between Israel and the West Bank-based Palestinian Authority have been stalled since Israeli forces began a 22-day military offensive in the Gaza Strip, controlled by the rival Hamas movement, more than a year ago.
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