Egyptian President Hosni Mubarak has said Arab states would recognise Israel and normalise ties, but only as part of a comprehensive peace deal.
Mr Mubarak is currently in Washington for talks with US officials.
The US is asking Arab states to begin normalising ties in return for a proposed temporary freeze in settlement building on the occupied West Bank.
But he said states which had trade ties with Israel might consider reviving them if it resumed peace negotiations.
"I affirmed to President Obama in Cairo that the Arab initiative offers recognition of Israel and normalisation with it after, and not before, achieving a just and comprehensive peace," Mr Mubarak said.
"I told him that some Arab states which had mutual trade representation offices with Israel could consider reopening those offices if Israel commits to stopping settlement and resumes final status negotiations with the Palestinian Authority where they left off with Olmert's government," he added.
In the interview with the state-controlled al-Ahram newspaper, Mr Mubarak said the Arab experience with Israel "did not encourage" any offers of compromise before tangible progress had been made.
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