Reporting from Jerusalem - In a limited thaw of a frosty relationship, Israeli and Palestinian officials held their first high-level meeting in months Wednesday and discussed ways to bolster a promising economic recovery in the West Bank.

The encounter was part of a shift by the West Bank-based Palestinian leadership, which previously shunned contact with Israeli Prime Minister Benjamin Netanyahu's government. That position was out of step with the Obama administration, which is seeking to bring the sides together.

Aides to Palestinian Authority President Mahmoud Abbas now say he is willing to meet with Netanyahu as early as this month, possibly on the sidelines of the United Nations General Assembly session in New York. But they emphasize that Abbas has yet to agree to a new round of U.S.-brokered peace negotiations or regular contact with Israel on political issues. The last round of peace talks broke off in December, three months before Netanyahu's right-leaning coalition took office.

Wednesday's meeting was between Bassem Khoury, the Palestinian Authority's economy minister, and Silvan Shalom, Israel's deputy prime minister appointed to work with the Palestinians on West Bank development. At a Jerusalem hotel they pored over a list of Israeli travel and trade restrictions that the Palestinians want eased.

The two men agreed to meet every four to six weeks.

Meanwhile, Israeli officials said, the two sides will set up teams to work on facilitating the entry of Palestinian entrepreneurs and VIPs to Israel; Israeli meat exports to the West Bank; dairy imports from the West Bank to Israel; treatment of Palestinians in medical facilities in Israel; and construction of industrial parks.

Khoury said he also called for freer movement of goods into and out of the Gaza Strip, which is controlled by the rival Hamas militant group and has been under Israeli and Egyptian blockade.

Israel restricts access to more than half of the West Bank and has ultimate control of roads, energy, water, telecommunications and airspace. A violent Palestinian uprising in 2000 brought an Israeli security crackdown, creating checkpoints on key routes and closing roads.

Netanyahu's government has eased some travel restrictions, enabling an economic upturn. The International Monetary Fund predicts that the West Bank economy could grow 7% this year, its first optimistic forecast in three years.

Khoury told reporters that significant constraints on movement in the West Bank remain but that the start of high-level talks could lead to further improvements.

"We hope there will be some action on the ground so we can really see the end of these measures that stifle the economy," he said.

Shalom called the meeting a step toward "economic peace," an idea central to Netanyahu's policy. The prime minister maintains that prosperity in the West Bank would reduce the risk of violence and improve conditions for agreement on political issues underlying the conflict.

Palestinian leaders say the term "economic peace" is Israeli code for putting off an agreement to create a Palestinian state.

Shalom said pursuing that goal "doesn't prevent political dialogue."

"Today's Palestinian decision not to wait for the diplomatic dialogue to begin, and go ahead with the economic dialogue, is the right decision," he told reporters. "They understand that boycotting meetings with Israel will not push us into making political concessions and was not working in their favor."

Tony Blair, the former British prime minister who serves as an international envoy to the region, welcomed the high-level economic talks. The West Bank recovery, he said, "will move quicker if you get the interaction between the two sides."

Blair has been pressing Israel to take major steps toward improving the West Bank economy. He is backing Palestinian efforts to create a large industrial park in Jenin, build a new city near Ramallah and gain control of Israeli broadcast frequencies for a Palestinian cellphone company.

Although Israel's easing of travel restrictions has helped the Palestinians, "we need some of these big items . . . things that will make a big difference in the West Bank economy," Blair told reporters in Jerusalem.

"But it is all necessarily fragile unless we get political progress" toward Palestinian statehood.

Abbas says he will not resume peace talks unless Israel halts all growth of Jewish settlements in the West Bank. After Wednesday's meeting, Abbas spokesman Nabil abu Rudaineh reaffirmed that position while downplaying the economic talks, which he said "were not related to political negotiations."

The Obama administration also has insisted on a settlement freeze, but Israeli officials say a compromise is in the works that would allow limited settlement growth during peace talks that President Obama wants to launch this fall. Two Israeli envoys were discussing the issue Wednesday in New York with George J. Mitchell, Obama's Mideast envoy.