BERLIN: The Israeli and Palestinian leaders are likely to hold their first meeting in the coming weeks, both sides indicated on Wednesday, in what would be an important step toward a formal resumption of peace talks and a key achievement for US President Barack Obama.

The announcements came as Israeli Prime Minister Benjamin Netanyahu held four hours of talks with Obama’s Mideast envoy, George Mitchell, in London on Wednesday. Mitchell has been pressing Israel to halt construction of West Bank settlements as a confidence-building gesture toward the Palestinians.

Before the meeting, Netanyahu said he was making headway in defusing the unusually public disagreement with the Americans. Netanyahu has said he wants a compromise that would allow Israel to proceed with some settlement construction while at the same time restarting peace talks with the Palestinians.

Netanyahu, who arrived in Germany later Wednesday for further meetings, did not offer any immediate comment following his meeting with Mitchell. But speaking alongside Mitchell before their talks, Netanyahu said he hoped peace negotiations would resume “shortly.” “We are making headway. My government has taken steps in both words and deeds to move forward,” he said. In the past week, both Israel and the US have been signaling that an agreement could be within reach.

It is unclear what sort of compromise would be acceptable to the Americans or to the Palestinians.

In a sign that Abbas was easing his position, Palestinian officials said their leader would likely meet Netanyahu on the sidelines of the UN General Assembly next month in New York. The officials said American diplomats are eager to see the sides resume contact. They said that while Abbas is prepared to talk to Netanyahu, he would not reopen negotiations until Israel halts its settlement activities.

The officials spoke on condition of anonymity because nothing has been formally scheduled.

In recent days, Netanyahu has said he sees the spotlight on settlements as unfair and insisted the Mideast conflict is rooted in a deep Arab enmity toward Israel that predates them. The subject of settlements was also sure to be raised at his meeting with German Chancellor Angela Merkel on Thursday.

Netanyahu’s aides have been dropping optimistic hints in recent days, saying a compromise with the US is growing closer. Mark Regev, Netanyahu’s spokesman, told reporters ahead of the Mitchell meeting, that the Israeli government hopes peace talks can be resumed “within several weeks.”

Israeli officials, like the Palestinians, have floated the idea of a meeting between Netanyahu and Abbas at the UN General Assembly.

Meanwhile, hundreds of Palestinians attended the funeral of Mansour Al-Batnije and his brother Nael Al-Batnije in Rafah in Gaza Strip on Wednesday. They were among the three Palestinians killed by Israeli bombing on Tuesday.