LONDON — The prime ministers of Israel and Britain met in London last week and agreed on the need for progress in the Mideast peace process.

 Benjamin Netanyahu and Gordon Brown. [Amos Ben Gershom GPO photo]

During their hour-long meeting Aug. 25 at 10 Downing Street, Benjamin Netanyahu and Gordon Brown also discussed the importance of acting to prevent Iran from producing nuclear weapons.

In the issue of West Bank Jewish settlements there was some disagreement. Brown said his government sees building in the settlements as an obstacle to the idea of two states for two people.

While Netanyahu has not approved any new settlement construction since coming into office, he says settlements should be allowed to expand for “natural growth.”

Netanyahu also made a clear distinction between building in eastern Jerusalem and in other areas of the West Bank. “Jerusalem is not a settlement,” Netanyahu said at a joint news conference following the meeting. “We’ve been building there for 3,000 years.”

Netanyahu outlined his plan for peace with the Palestinians on the basis of a demilitarized Palestinian state alongside Israel, and Brown endorsed Netanyahu’s call for action to build the Palestinian economy. Netanyahu said he wants to see a solution to the Palestinian refugee problem “once and for all,” explaining that he sees the solution as lying within a future Palestinian state, so that Israel will remain a Jewish state.

Hundreds of anti-Netanyahu demonstrators gathered outside the gates to the prime minister’s official residence, forcing Netanyahu’s motorcade to enter through a side entrance. The demonstrators held signs saying “Free Gaza” and referring to Netanyahu as a “war criminal.”

In related news, Netanyahu’ office denied reports that Israel has agreed to halt construction in West Bank settlements.

At a news conference in Berlin last Thursday following his meeting with German Chancellor Angela Merkel, Netanyahu also said the Palestinians first must recognize Israel’s right to exist as a Jewish state before negotiations could be held.

Merkel said Israel must stop building settlements in the West Bank if there is to be progress in peace talks with the Palestinians.

The two leaders also discussed Iran. Merkel said that if Iran’s government does not respond to overtures from the West by September and halting its uranium enrichment program, the international community should seriously consider tougher trade sanctions against the Islamic Republic, particularly in energy and finance.

Netanyahu said the sanctions should “really hurt,” and that if the UN Security Council does not act, a “coalition of the willing” should.

It’s not clear that UN Security Council members Russia and China would support tougher sanctions against Iran. The other three permanent members of the council – Britain, France and the United States – would likely do so.

The two leaders also reportedly discussed the case of abducted Israeli soldier Gilad Schalit. Germany has played a key role in mediating efforts to win the release of Schalit, who was taken captive by Hamas in 2006.

In an interview Aug. 27 with a German news agency, a senior Hamas leader said the group was waiting for Israel to respond to a possible deal for Schalit, the Jerusalem Post reported.

During his visit to Germany, Netanyahu also met with German President Horst Koehler and Foreign Minister Frank-Walter Steinmeier.

Netanyahu’s state visit included a tour of the museum and archive at the House of the Wannssee Conference, the villa where plans were laid out in January 1942 for the extermination of European Jewry.

On behalf of the Yad Vashem Holocaust Memorial in Israel, Netanyahu also received a donation of original architectural drawings of the Auschwitz-Birkenau extermination camp, which were found in Berlin last year and purchased by the Axel-Springer media company.