WASHINGTON, Aug. 18 (Xinhua) -- U.S. President Barack Obama on Tuesday praised Israel for "right movement" on Jewish settlement issue and called on the Palestinians and the Arab countries to show peace gesture toward Israel.

    "There has been movement in the right direction," Obama said after meeting with his Egyptian counterpart Hosni Mubarak in the White House, referring to the reports that the Israeli government had stopped issuing permission for new settlements in the West Bank.

U.S. President Barack Obama (R) meets with Egyptian President Hosni Mubarak in the Oval Office of the White House in Washington, U.S., Aug. 18, 2009

The president, who has asked Israeli Prime Minister Benjamin Netanyahu to freeze all settlements activities in the West Bank and East Jerusalem, said he was "encouraged by what I am seeing on the ground."

    "My hope is that we are going to see not just movement from the Israelis but also from the Palestinians on incitement and security but also from Arab states that shows their willingness to engage Israel," said the president.

    "All parties have to take steps to restart serious negotiations," said Obama, adding that the Palestinians must end the incitement and violence against Israel.

U.S. President Barack Obama (R) meets with Egyptian President Hosni Mubarak in the Oval Office of the White House in Washington, U.S., Aug. 18, 2009

The Obama administration has been encouraging Arab countries to engage Israel in order to normalize relations with the Jewish state in return for a freeze in settlement activities in the occupied Palestinian territories.

    Echoing Obama's call, President Mubarak stressed that the Jewish settlement issue was one of the core issues between Israel and the Palestinians and the Arab countries, adding that the Arab countries "are ready to help if the Israelis and the Palestinians returned to peace talks."

U.S. President Barack Obama (R) meets with Egyptian President Hosni Mubarak in the Oval Office of the White House in Washington, U.S., Aug. 18, 2009