A White House statement issued Thursday night at the conclusion of four days of talks between Israeli and US officials in Washington indicated that the US expects that Israel will be curbing construction of housing in West Bank areas claimed by Palestinians for a future state.
The American delegation "reiterated President (Donald) Trump's concerns regarding settlement activity in the context of moving towards a peace agreement," the statement said. "The Israeli delegation made clear that Israel's intent going forward is to adopt a policy regarding settlement activity that takes those concerns into consideration."
US and Israeli officials said that Jason Greenblatt, Trump's special representative on peace negotiations, made clear during the talks, which built on another round of meetings in the Middle East earlier in the month, that the President wants Israel to slow settlement construction and doesn't want such activity to jeopardize efforts to restart the peace process.
The Trump administration has told Israel to build within the boundaries of existing settlements and not to establish new communities, according to the sources. Soon after Trump took office, Netanyahu announced that Israel would establish the first new settlement in some two decades.
Greenblatt also told the Israelis that Trump wants to see Netanyahu demonstrate he is willing to take steps to slow construction and take other confidence-building measures, according to the officials.
But Israeli Prime Minister Benjamin Netanyahu has been reluctant to stop settlement building, and his leadership is facing a challenge from the right wing that is pushing for increased building and even annexation of parts of the West Bank. It is unclear that he will deliver what the US is hoping for on the politically explosive issue.
"We have a clearer understanding of where and how the White House wants to see us build," a senior Israeli official said after the two rounds of talks.
The US-Israeli agreement under discussion is expected to be announced with a set of economic and development projects in the Palestinian territories with an emphasis on Gaza, the officials said.
Thursday night's White House statement said the talks explored "concrete, near-term measures to improve the overall climate in order to advance the prospects for a genuine and lasting peace between Israel and the Palestinians," focusing on "specific measures that could have a meaningful impact on the economic environment in the West Bank and Gaza."
"The talks were serious and constructive, and they are ongoing," the statement said.
Diplomatic sources said the agreement and economic measures are meant to lay the groundwork for an eventual resumption of the peace process.
US, Israeli and Arab officials said the flurry of diplomatic activity is working toward a US-sponsored meeting between Netanyahu, Arab Leaders and Palestinian President Mahmoud Abbas in the coming months. No date has been scheduled for the summit, and the sources said Trump's advisers have stressed the importance of laying the groundwork before holding such a meeting.
"The key will be ensuring that this meeting is more than a photo-op," one Arab official said. "It's important to prepare a resumption of the peace process so that there is a well-defined outcome."
The Israeli delegation to Washington was led by Yoav Horowitz, Netyanyahu's chief of staff, and included Israeli lawyers who specialize in legal issues related to the settlements.
Greenblatt led the US delegation of National Security Council and State Department officials in both Washington and overseas.
In addition to two meetings with Netanyahu, Greenblatt met with Abbas, Palestinian civil society groups and visited with Palestinian children in a West Bank Refugee camp. He also traveled to Amman to meet with Jordan's King Abdullah.
Following a meeting with Netanyahu last month, Trump urged Netanyahu to curb new housing construction while he pursued a peace deal, a position past presidents have adopted.
"I'd like to see you hold back on settlements for a little bit," he told the Israeli premier at a press conference.
A parade of Arab leaders is expected to visit Washington for meetings with Trump and other top officials over the next several weeks, starting with Egyptian President Fattah el-Sisi on April 3 and culminating with a visit to the White House by Abbas later next month.
Trump invited Abbas to the White House during their first phone call two weeks ago. Abbas's office said that he told Greenblatt during their meeting that he believed a "historic peace deal is possible" under Trump's leadership.
In addition to Greenblatt's meetings, Trump's son-in-law and senior adviser Jared Kushner has also been meeting with Israeli and Arab leaders in recent months to better understand the climate in the region. Trump has said he wants Kushner to lead the peace process.
During his news conference with Netanyahu, Trump abandoned two decades of US foreign policy by declaring the US would not insist on a so-called two-state solution leading to the creation of a Palestinian state as part of a peace deal between Israelis and Palestinians.
"I'm looking at two-state and one-state" formulations, Trump said alongside Netanyahu. "I am very happy with the one that both parties like. I can live with either one."