"We still have not overcome the differences," a senior U.S. official said. But with the Mideast peace process hanging in the balance, Albright and Netanyahu agreed to meet again Thursday afternoon.
A senior Netanyahu adviser, David Bar-Illan, said, "It was a good meeting in a productive atmosphere."
U.S. officials declined to discuss the tenor of the talks. In a terse statement, State Department spokesman James P. Rubin said Albright and Netanyahu met "to try to overcome the remaining differences and thereby put the Middle East peace process back on track."
Albright had scheduled only one day of talks with Netanyahu. But she canceled a trip she was to take to The Netherlands on Thursday so that she and the Israeli prime minister could meet again.
Netanyahu already was due to remain in Washington until Friday afternoon for meetings with members of Congress, many of whom have backed his reluctance to give up more of the West Bank, and for speeches to the American Jewish Committee and the Washington Institute for Near East Policy, a research organization.
In the meantime, American and Israeli experts held their own talks in an effort to untangle the dispute over the Clinton administration's package of proposals that has as its centerpiece a call for Israel to relinquish 13 percent of the territory it captured in the 1967 Mideast War.
In Germany, President Clinton kept a watchful eye, his hopes for launching a Mideast summit this week already crushed by Netanyahu's refusal to accept the U.S. proposal, with the argument that it endangered the security of several Jewish settlements that would be stripped of the protection of Israeli troops.
Taking a soft tone, Clinton said in Potsdam that the administration was not prescribing all the terms of a settlement but simply trying to help Israel and the Palestinians "over the hurdle" of their 15-month stalemate .
Albright made no statement as she left a downtown hotel where she had met with the prime minister against a backdrop U.S. concern that peacemaking with the Palestinians may be at a dead end.
Going into the talks, Netanyahu told reporters, "We are hopeful there will be some progress, but we will not compromise our security needs."
At the State Department, Rubin said, "Our ideas are virtually identical with the essential elements of the desires of the prime minister. ... We believe Israel is engaged in an effort with us to put the peace process back on track."
"Act before it is too late," Albright admonished Tuesday, insisting the entire Middle East peace process is in jeopardy.