Egypt's President Hosni Mubarak received Wednesday a phone call from U.S. President Barack Obama during which they discussed the requirements for starting direct peace talks between the Palestinians and Israel, Egypt's official MENA news agency reported.

Mubarak underlined during the conversation Egypt's appreciation of the commitment of U.S. president to establish peace and create a propitious atmosphere for launching peace talks in line with clear terms of reference and a specific time frame.

He also asserted that Israel should undertake tangible measures to halt settlement activities in a confidence-building measure with the Palestinians in both the West Bank and the Gaza Strip.

On Monday, Mubarak received a phone call from Israeli Prime Minister Benjamin Netanyahu as a continuation of consultations between the two sides last month.

Conversation over phone came one day after Israeli President Shimon Peres held talks in Egypt with Mubarak. The two sides discussed efforts to relaunch the Middle East peace process and the chance to move into direct peace talks between the Palestinians and the Israelis.

The Arab League (AL) agreed last Thursday in principle to endorse direct peace talks between the Palestinians and Israel, but left time of holding talks to the discretion of Palestinian President Mahmoud Abbas.

As for Tuesday's clashes between Lebanese and Israeli armies in southern Lebanon, Mubarak warned of the consequences of this escalation to the peace process and the regional situation at large.

Israeli and Lebanese armies exchanged fire along the internationally recognized border on Tuesday. Media reports say that at least three Lebanese soldiers and a journalist were killed in the incident.