Israeli Prime Minister Benjamin Netanyahu told his cabinet on Sunday that he had been presented with "new and interesting ideas" to move the Middle East peace process forward during his meeting earlier in the morning with US special envoy George Mitchell.

Netanyahu said that if the Palestinians accept Mitchell's latest proposal, which he did not elaborate on, then real progress toward peace could be made very soon.

Mitchell was originally scheduled to return to Washington on Saturday, but requested an additional round of meetings with Israeli leaders after failing on Friday to get Palestinian leader Mahmoud Abbas to drop his demand that Israel halt Jewish construction in Jerusalem as a precondition to peace talks.

It is presumed that Mitchell's proposal to Netanyahu on Sunday involved a softening of Israel's position on the right to build in Jerusalem.