``The discussion concerned ways to overcome differences about further Israeli troop redeployments in the West Bank,'' said Danny Naveh, the Israeli cabinet secretary and one of Netanyahu's closest aides.

Netanyahu called Arafat late on Tuesday, hours before two Jewish settlers were killed by Palestinians in an attack on the West Bank which prompted calls from Israeli hardliners for the suspension of negotiations with Arafat's Palestinian Authority. Israel radio said the conversation yielded no progress on the central issue of long-overdue further Israeli troop withdrawals from the West Bank. The talks centre on a US-drafted proposal for Israel to withdraw from a further 13 percent of the West Bank in exchange for tougher Palestinian Authority actionagainst anti-Israel radicals.

Netanyahu's right-wing government has for months rejected the US pullback proposal as excessive. But it recently put forward a compromise which would transfer 10 percent more of the West Bank to self-rule while designating a further three percent ``nature reserves'' where the Palestinians would have very limited powers.

Arafat rejected the Israeli idea this week and said the Palestinians were considering breaking off negotiations.

In a speech to the Palestinian legislative council on Wednesday, Arafat called on the United States to intervene actively to either force Israeli acceptance of its proposals or publicly hold Netanyahu responsible for the breakdown in the peace process.

Israeli officials said Netanyahu discussed the negotiations this week with US Secretary of State Madeleine Albright, who also spoke with Arafat on Tuesday.

On Wednesday Netanyahu for the first time presented fellow ministers with a map of a possible ``10 plus three percent'' deal for the WestBank redeployments, Israel radio said. The plan, which would place the ``nature reserves'' in an unpopulated part of the Judean desert east of Bethlehem, was strongly opposed by the leading hawk in the cabinet, Infrastructure Minister Ariel Sharon, the radio said.