Palestinian Authority President Mahmoud Abbas on Thursday sought guarantees from Washington that it would pressure Israel to cancel its plan for 1,600 new housing units in East Jerusalem, Palestinian media outlets reported.

U.S. Mideast envoy George Mitchell spoke with Abbas late Thursday and urged him not to walk away from indirect peace negotiations with Israel, a senior Palestinian official quoted in the reports said.

Prime Minister Benjamin Netanyahu on Thursday said he believes indirect talks with the PA will continue as planned early next week despite the crisis with the U.S. over the plan for new housing in East Jerusalem and the protests by the Palestinian Authority and Arab world. "The crisis is behind us," sources in the Prime Minister's Bureau. They said proof was the invitation to Netanyahu by U.S. Vice President Joe Biden to meet in Washington in 10 days while Netanyahu visits a meeting of the AIPAC lobby group.

Nonetheless, senior American officials said that even though the crisis is over publicly, it will take time to restore trust between the two sides.

The future of the negotiations was raised during a telephone conversation between Biden and Netanyahu Thursday. Biden also discussed the issue with Palestinian President Mahmoud Abbas.

Biden told the Palestinian leader that the United States opposes settlement construction but is determined to resume talks. He stressed to Abbas that Washington would disapprove of a delay in taking the talks forward.

State Department spokesman P.J. Crowley on Thursday also said the U.S. believes indirect peace talks will go ahead as scheduled, casting doubt over comments by Arab League chief Amr Moussa on Wednesday who said Abbas had decided to scrap the talks to protest Israel's plan.

"I don't think that that report that's been circulating for the last 24 hours is accurate," Crowley said. "As far as I know, we are still moving forward. We have not heard from the Palestinians that they have pulled out."

He said that Mitchell and Assistant Secretary of State Jeffrey Feltman had been telephoning regional leaders to assess the situation following Israel's announcement, but that Mitchell still planned to return to the region next week with a view to launching the talks.

"George Mitchell is planning to be in the region next week and for further discussions on these issues. We remain committed to the process that is under way," Crowley said.