Prime Minister Benjamin Netanyahu and U.S. special Mideast envoy George Mitchell will meet in two weeks to reach a final agreement on settlement construction in the West Bank.

Defense Minister Ehud Barak and George Mitchell agreed during their talks in New York this week that Israel must take action toward easing access for Palestinians in the territory and halting settlement activity.

Their four-hour discussion brought Israel and the United States closer to ending its dispute over settlement construction, a source close to Barak said.

Mitchell did not explicitly tell Barak that Israel must impose a complete freeze on settlements - as the U.S. has been demanding - but rather emphasized that Jerusalem must take "action" on the matter, according to a Defense Ministry statement following the talks.

Asked whether Israel would declare a temporary settlement
building freeze, Barak told reporters following the meeting: "I think that it's a little bit too early to predict.

"We are considering every positive contribution Israel can make towards the taking off of a significant important peace effort," he said.

While significant progress was made in the talks, said the source close to Barak, differences remain over a number of subjects.

"There is still disagreement, but the direction is positive and there is a good dialogue," a source close to the defense minister said.

Barak and Mitchell discussed a spectrum of peace and security-related issues, according to the Defense Ministry. Part of their talks were dedicated to the contributions Israel, Palestinians, Arab states and the international community must make in order to advance the peace progress.

The two agreed that measures must be taken to "create a climate conducive to peace," said the Defense Ministry, including steps by Arab states to normalize relations with Israel and actions by Israel itself to lighten the tensions in the West Bank.

"The discussions were constructive and will continue soon," said the Defense Ministry statement.

Prime Minister Benjamin Netanyahu's refusal to accede to Obama's demand for a complete halt to West Bank settlement construction has sparked tensions between Israel and the United States.

Barak traveled to the U.S. in an effort to reach a compromise formula on the matter. His advisers participated in the first two hours of the meeting, as did Netanyahu's emissary, Attorney Yitzhak Molcho; Barak and Mitchell held a tete-a-tete for the remainder of the time.

The meeting took place in light of a recent disagreement among the "forum of six" ministers over this issue.

A political source in Jerusalem said Monday that a "temporary freeze" of construction in the settlements was met with objections by three of the six senior ministers in the forum.

The meeting takes place in light of a recent disagreement among the "forum of six" ministers over this issue.

A political source in Jerusalem said Monday that a "temporary freeze" of construction in the settlements was met with objections by three of the six senior ministers in the forum.