The United States and Israel have reached agreement that Israel could continue to build houses in East Jerusalem, local media reported Friday.

Although the two countries had disagreement, they still agreed Israel's construction policy in Jerusalem doesn't change, a spokesman for Prime Minister Benjamin Netanyahu was quoted as saying.

On Wednesday, U.S. officials who refused to be named said the United States did not reach agreement with Israel over the latter's settlement plan after two days of visit by Israeli Prime Minister Benjamin Netanyahu.

The two sides were trying to find ways to get Israeli-Palestinian peace talks back on track and Netanyahu had prolonged his stay with an hope for an agreement, the officials said.

The United States has demanded that Israel reverse new housing plan in East Jerusalem, 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.