Mr. Obama said he saw signs that Israel's resistance to his call to freeze settlement-building in the occupied West Bank was weakening. He was responding to a question about reports that Israel had stopped granting permission for new settlements in the West Bank, even though projects in progress were continuing.
President Obama has made resuming peace talks between Israel and the Palestinians one of his key foreign policy goals, hoping a breakthrough there would lead to wider agreements among the Jewish state and the Arab world.
Hear what Council on Foreign Relations analyst Steven Cook has to say about the meeting in an Online NewsHour reporter's podcast.
Earlier Tuesday, an Israeli government minister said no tenders had been issued for new housing projects in settlements since Prime Minister Benjamin Netanyahu's right-leaning government took office five months ago, according to Reuters.
Netanyahu has rejected President Obama's pressure for a complete freeze and the impasse has created the most serious rift in U.S.-Israeli relations in a decade. Palestinian President Mahmoud Abbas says he will not resume peace talks with Israel until it stops adding to its settlements.
"There has been movement in the right direction," Mr. Obama said when asked about the latest development after talks with Mubarak, 81, at the White House.
While Netanyahu appeared to be trying to appease Washington, Israeli anti-settlement group Peace Now said construction was continuing on 1,000 housing units.
Egypt is showing greater willingness to help with the Middle East peace effort after its relationship with the United States deteriorated during the Bush administration, which put pressure on the nation over democracy and human rights issues.
President Obama visited Egypt in June to deliver a speech to the Muslim world calling for stronger U.S.-Muslim alliances, urging each to put suspicions aside and unite to combat violent extremism. Mubarak called the speech a positive turning point in U.S. relations with the Arab world.
"I affirmed to President Obama in Cairo that the Arab initiative offers recognition of Israel and normalization with it after, and not before, achieving a just and comprehensive peace," Mubarak told Egyptian state-controlled newspaper al-Ahram on Monday, reported Reuters.
On Monday evening, during an interview on the "Charlie Rose Show," Mubarak said Egypt is trying to reconcile a deep divide between the rival Palestinian factions Fatah and Hamas.
"We should bridge the gap because, unless we reconcile their differences, there will not be stability there, there will not be stability even in Israel. Violence will recur," Mubarak said.
Fatah and Hamas have been divided since Hamas, which won 2006 Palestinian parliamentary elections, took control of the Gaza Strip from Palestinian President Mahmoud Abbas' Fatah in 2007. Fatah is still in control of the West Bank and backed by the West. A sticking point between the two groups is peacemaking with Israel, with Hamas largely opposed to Abbas' peace talks with the Jewish state.
---- Compiled from wire reports and other media sources