Egyptian President Hosni Mubarak meets with Israeli Prime Minister Benjamin Netanyahu (L)in the Presidential House in Cairo, capital of Egypt, Sept. 13, 2009. (Xinhua/Zhang Ning) Photo Gallery>>>

    CAIRO, Sept. 13 (Xinhua) -- Egyptian President Hosni Mubarak on Sunday held talks with Israeli Prime Minister Benjamin Netanyahu in which the veteran mediator asked Israel to stop settlements so as to push the peace process in the Middle East.

    After their closed-door meeting, Egyptian presidential spokesman Suleiman Awad said that Mubarak called on Israeli prime minister during the talks to halt all kinds of settlement activities including the natural growth of the settlements.

    The suspension of Israel-Palestinian talks was attributed partly to Netanyahu's refusal to heed Washington's repeated demands that Israel halt all settlement activities on occupied Palestinian territories.

    Mubarak also called Israel to stop trying to judaize Jerusalem, warning of the serious implications of that on peace efforts due to the importance of Jerusalem for the Arab and Muslim World.

    The Egyptian president emphasized the necessity of resuming negotiations between the Palestinians and Israelis from where they stopped.

    Mubarak said it is useless to talk about a Palestinian state with provisional borders, calling for negotiations on the final borders of the Palestinian state.

    Earlier on Sunday, Netanyahu expressed hope that relevant parties involved in the intractable Middle East peace process would narrow their gaps and push the historic cause forward.

    "There is still work to do. We have made progress on certain issues, there are also certain issues on which we have yet to make progress," said Netanyahu at the weekly cabinet meeting.

    "I hope that we will succeed in reducing the gaps, maybe we will bridge them, so that we can move the process forward," he told the cabinet, saying that "it is not we who are placing obstacles against entering into a diplomatic process."

Israeli Prime Minister Benjamin Netanyahu speaks while meeting with Egyptian President Hosni Mubarak in the Presidential House in Cairo, capital of Egypt, Sept. 13, 2009. (Xinhua/Zhang Ning) Photo Gallery>>>

    Meanwhile, Israeli President Shimon Peres on Sunday told U.S. President Barack Obama's Middle East envoy George Mitchell that time is right to restart the Israeli-Palestinian peace negotiations this month.

    "I do believe there is a fair chance to renew the negotiations by the end of this month. I think that the time may be right to do so," said Peres alongside George Mitchell.

    Obama administration has shown apparent interest in convening atripartite summit with Israeli and Palestinian leaders on the sidelines of the UN General Assembly later this month, when they are expected to officially declare the resumption of peace talks.

    Noting that gaps still remain among the parties, the largely ceremonial president stressed that Israel is totally in agreement with President Obama about the basic role and that current differences are manageable.

    Netanyahu's visit to Egypt is the second after his visit in May11 in the Egyptian resort of Sharm el-Sheikh in which he said, "we want peace with Palestinians, we want both Palestinians and Israelis to live side by side in peace, and we want to start peace talks with the Palestinians in the next few weeks."

    Netanyahu arrived in Cairo on Sunday afternoon for talks with Mubarak and the two leaders shared Iftar, the fast-breaking meal in the Muslim holy month of Ramadan. Netanyahu is scheduled to meet Mitchell on Monday.