Israeli Prime Minister Benjamin Netanyahu has sought to put a public row with Washington behind him in talks with US Middle East envoy George Mitchell.
Before discussions in London with President Barack Obama's envoy, Mr Netanyahu said he hopes to start 'normal talks' with Palestinians shortly.
Mr Netanyahu added: 'We are making headway. My government has taken steps both in words and deeds to move forward.'
The two men held a four-hour meeting in London, shortly before Mr Netanyahu's departure for Germany.
There was no immediate word on the content of the closed-door talks.
Mr Mitchell is believed to have pressed Prime Minister Netanyahu to freeze Jewish settlement construction in the occupied West Bank and east Jerusalem, where the Palestinians want to build their future state and capital along with Gaza.
With the international community backing the US demand, the Israeli prime minister finds himself trying to placate intense diplomatic pressure while keeping together his right-leaning coalition government.
He has so far rejected demands to halt construction in east Jerusalem and insisted on the need to guarantee settlers' 'normal life'.
Mr Netanyahu has nevertheless voiced optimism that the dialogue with Mr Mitchell will end within weeks and allow the renewal of the talks, which were halted last December after Israel launched a deadly offensive in Gaza.
Officials have also said that Mr Netanyahu has tacitly agreed to halt issuing new construction tenders in the West Bank, but that does not include plans already approved to construct thousands of houses in settlements.
The US State Department echoed optimism on peace talks, spokesman Ian Kelly said he was hopeful they would restart 'very soon'
Speaking to reporters after meeting his British counterpart Gordon Brown yesterday, Mr Netanyahu said he wanted to find with Mr Mitchell 'a bridging formula that will enable us at once launch a process but enable those residents (in settlements) to continue living normal lives'.
