Israel's Prime Minister Benjamin Netanyahu

Israel's prime minister says his country is working to reach a compromise with the United States that will allow Israelis to continue building controversial settlements while restarting peace talks with Palestinians.

U.S. and Palestinian officials want Israel to stop construction in East Jerusalem and West Bank settlements in order to encourage Arab-Israeli peace talks.

But speaking in London Tuesday, Prime Minister Benjamin Netanyahu said Israel will not accept attempts to limit construction in Jerusalem. He said he hopes that during upcoming talks with U.S. officials, they will find a way to both enter peace talks and allow settlement residents to continue with their lives. The United States has not responded.

British Prime Minister Gordon Brown, who met with the Israeli leader in London, said he is more optimistic about making progress on the peace process. Mr. Brown also repeated calls for a halt to settlement construction.  

This week the Israeli prime minister is traveling through Europe, and also meeting with U.S. envoy George Mitchell and German Chancellor Angela Merkel.

Officials involved with the talks say they do not expect any breakthroughs.

Some information for this report was provided by AFP, AP.