Israeli officials were to meet Wednesday with US envoy George Mitchell as an Israeli diplomat said both sides moved toward an understanding on the future of Jewish settlements in the West Bank.

US State Department spokesman Ian Kelly told reporters Tuesday that Mitchell would meet in New York on Wednesday with Israeli Defense Minister Ehud Barak's chief of staff Michael Herzog.

He expected a statement to be issued afterward.

An Israeli diplomat told AFP that Yitzhak Molcho, Prime Minister Benjamin Netanyahu's attorney, would also attend the meeting which he said comes as the two sides move toward an understanding on settlements.

"It's definitely not a dispute," the diplomat said on the condition of anonymity when asked about US demands for a total settlement freeze. "There's a very good will on both sides to reach an encompassing understanding."

The diplomat added: "The discussion is basically how to handle what kind of understanding to reach on settlements."

The two sides are trying to work out the "length, scope, exit strategy, what happens after such a freeze, should it be agreed upon," he said.

"There's still a bit of ground to be covered. But definitely we are moving in that direction."

He said he does not know the "terminology" of the discussions, but when Israel refers to a freeze, it refers to the West Bank, not east Jerusalem, which Israel wants as part of its undivided capital.

The Palestinians want east Jerusalem as the capital of a future state.

The diplomat said the United States is also trying to get the Palestinians and Arab states to offer something in a bid to revive Israeli-Palestinian negotiations that stalled at the end of the administration of George W. Bush.

Washington has called for Arab states to take steps toward normalizing ties with Israel.

The talks, the diplomat said, follow those Mitchell held last week in London with Netanyahu and will pave the way for a new round of talks between Mitchell and Barak.

Anything not decided on during the talks Wednesday in the United States will be left for Netanyahu and Barak to rule on, the diplomat added.