The United States and Israel did not reach agreement on Israel's settlement in East Jerusalem, a spokesman for Prime Minister Benjamin Netanyahu was quoted by Reuters as saying Friday.

Earlier reports quoted an Israeli official as saying the United States and Israel have reached agreement that Israel could continue to build houses in East Jerusalem.

On Wednesday, U.S. officials 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 Netanyahu.

The two sides were trying to find ways to get Israeli-Palestinian peace talks back on track.

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.