WORLD: Obama poised to bring both sides in Middle East together

The deal, which would see the US offer Israel tough sanctions on Iran over its alleged nuclear weapons programme, could be pushed through before the end of next month, according to US, Israeli, Palestinian and European officials.

Israel, in return, will be expected to agree a partial halt to the construction of disputed settlements in the occupied West Bank, a main stumbling block to peace talks with Palestinians.

It is thought details of the plan were being thrashed out in London today, as Israeli prime minister Benjamin Netanyahu continued his four-day tour of Europe with a meeting with senior US diplomat George Mitchell.

Earlier, during talks with Gordon Brown, Mr Netanyahu promised no new settlements would be built, which both Britain and America want.

Following his talks yesterday, Mr Netanyahu said Israel intended to "move forward" on dealing with the issue. "With the help of our friends in the United States, in Britain and elsewhere, I think we can achieve progress that may confront the cynics and surprise the world, but there is no substitute for courageous leadership on all sides," he said.

He called for Palestinian leaders to be "be courageous partners for peace".

The US administration has been putting Mr Netanyahu under pressure to freeze all settlement building. Gordon Brown has warned the issue is an obstacle to peace in the Middle East.

But the Israeli government insists settlements must be allowed to enjoy "natural growth", so families are not split up by any freeze.

After months of negotiations, Israel finally appears to be moving slowly towards a position that allows peace talks to resume. Mr Netanyahu will wait to hear details from Mr Mitchell on what concessions Arab countries are prepared to give in return.

The Guardian reports today that the negotiations have reached such an advanced stage that both France and Russia have approached the US with offers to host a peace conference. President Obama is reported to be hopeful of making an announcement at a meeting of the UN general assembly or the G20 summit in Pittsburgh, both of which are at the end of September

The president faced an outspoken attack today from Dick Cheney over allegations of torture of terror suspects. The former vice-president said the issue has cast doubt on President Obama's ability to lead America. He was criticising the decision by the US attorney-general to appoint a special prosecutor to look into allegations of CIA torture on terror suspects.

He said agents who extracted information from al Qaeda suspects "deserve our gratitude" rather than "prosecutions".