Egyptian President Hosni Mubarak and Israeli Prime Minister Benjamin Netanyahu met Tuesday to discuss ways to revive the Israeli-Palestinian peace process.

The two leaders held talks Tuesday at Mr. Mubarak's office in Cairo.

Mr. Netanyahu's office issued a statement after the meeting describing the talks as "in-depth" and "friendly."  It also said the two men discussed efforts to secure the release of an Israeli solider held captive in Gaza.

Egypt has been mediating a prisoner swap deal between Israel and the Hamas militant group. 

Hamas is demanding that Israel free about 1,000 Palestinian prisoners in return for Israeli soldier Gilad Shalit, who has been held by militants in Gaza for more than three years.

Mr. Netanyahu arrived in Cairo Tuesday in the face of Egyptian criticism about Israel's plans to build nearly 700 housing units in Jewish neighborhoods of disputed East Jerusalem.  Those plans were announced Monday.

Egyptian Foreign Minister Ahmed Aboul Gheit said Tuesday that Israeli settlement construction on land the Palestinians claim for a state undermines efforts to resume peace talks.  He said it also casts doubt on Israel's willingness to reach a final peace deal.

Israel captured East Jerusalem from Jordan in the 1967 Mideast War and annexed it in a move not recognized internationally.  Israel does not consider East Jerusalem neighborhoods to be settlements and claims all of the city as its eternal capital.

Palestinians claim East Jerusalem as the capital of a future state.

Egypt's state-run news agency says Mr. Mubarak and Mr. Netanyahu also discussed calls by international rights activists for a lifting of an Israeli and Egyptian blockade on the Gaza Strip.  The two nations imposed the blockade in 2007 after Hamas militants seized power in Gaza.

Some information for this report was provided by AFP and Reuters.