U.S. President Barack Obama asked Israeli Prime Minister Benjamin Netanyahu to build confidence for the Middle East peace talks during their meeting on Tuesday, the White House said on Wednesday.?

The talks were "honest and straightforward," said the White House spokesman Robert Gibbs.

Obama and Netanyahu held a 90-minute closed-door meeting at the White House on Tuesday, trying to defuse the bilateral tensions arising from Israel's new housing plan in East Jerusalem.

The United States has demanded that Israel reverse the housing plan, which Netanyahu has so far rejected. The U.S.-brokered indirect talks between Israelis and Palestinians are currently stalled as the Palestinians refused to negotiate unless Israel stops building in East Jerusalem.

"There are areas in which we have disagreements. Those were discussed last night," said Gibbs, adding that Obama asked Netanyahu "to build confidence up to proximity talks."

The Obama administration, who has been trying its best to push the Israeli-Palestinian peace talks, was angry over the Israeli government's approval of 1,600 homes in East Jerusalem on March 9 when U.S. Vice President Joe Biden was pushing both Israel and the Palestinians to resume peace talks.

Both Biden and Secretary of State Hillary Rodham Clinton issued condemnation on the Netanyahu-led government for the move, which was described by Clinton as "an insult" and "a deeply negative signal" about Israel's approach to relations with Washington.

Before the meeting with Obama, Netanyahu told the AIPAC conference that building more houses in the Jewish neighborhoods " in no way precludes the possibility of the two-state solution," stressing that Jerusalem is not a settlement, but the eternal capital of Israel.

On Tuesday afternoon, Netanyahu met with some influential Congress members and told the lawmakers that the peace process may be delayed for another year should the Palestinians refused to drop "illogical and unreasonable demand" for Israel's full freeze on Jewish settlements.

The Palestinians insists that the peace talks will not be resumed until the Israeli government totally freezes the Jewish settlement activities in the West Bank and East Jerusalem, while the Israeli government claims to ensure the "natural growth" of the Jewish settlements.