In a small conciliatory gesture Mr Netanyahu said his government would ease its five-month-long sealing off of the Palestinian areas in Gaza and the West Bank by allowing an extra 10,000 workers to enter Israel. He also said that David Levy, the Israeli foreign minister, would meet Yasser Arafat, the Palestinian leader, next week.
Although Mr Netanyahu offered little new, it was enough for Mr Mubarak to say: "I think that after such a meeting today I have great hopes that the process will continue ... I can tell you now that I am very relaxed."
The warm welcome for Mr Netanyahu's promises to continue the peace process is in part a tribute to his success in systematically lowering expectations among his Arab neighbours about what to expect from Israel. It also stems from Mr Mubarak's need to balance between the United States and the Arab world. The Egyptian leader goes to Washington at the end of the month.
Mr Mubarak said: "The two sides should proceed to negotiate the final status of the West Bank and Gaza - the sooner the better. Together with that, negotiations must resume on the Syrian and Lebanese tracks without delay." But since Mr Netanyahu has refused any compromise on Palestinian statehood, Israeli settlements, Jerusalem or withdrawal from the Golan, such negotiations are unlikely to have much substance.
The cordial tone of the discussions in Cairo are in contrast to the insults hurled at Mr Netanyahu by the Egyptian opposition press which, in a clumsy play on the Arabic pronunciation of his name, described him as "a dirty smell".
The Israeli leader said nothing new about the withdrawal of Israeli forces from most of the Palestinian city of Hebron, though this is expected over the next month. Under the terms of an agreement signed last year Israeli troops will keep control of one-fifth of Hebron where 400-500 Jewish settlers live surrounded by 120,000 Palestinians.
There are signs on the West Bank that Israel is continuing its redeployment. Just west of Nablus, an Israeli checkpoint at a vital crossroads has been removed. The army brigade in charge of the Nablus area is to be disbanded, Israeli radio said yesterday. This thinning out of troops is probably because of the completion of bypass roads linking Israeli settlements to Israel.
In Washington and in Cairo Mr Netanyahu refused to say that he would not build more settlements. Settlers themselves have spoken about doubling their numbers in the next four years to 300,000. In practice, Mr Netanyahu will probably be satisfied with more settlements in and around Jerusalem and close to the green line which divides the city.
Saeb Erekat, a senior Palestinian official, said however that "another settlement here or there will not promote Israel's security. Yet such settlements create a negative impression with Palestinians, comparable to the feeling in Israel that follows from a bus explosion". Saying that the Palestine Authority had done everything it could against Palestinian guerrilla organisations, Mr Erekat added: "Israel must understand that the Palestinians have not disappeared, and will not disappear. They exist."Reuse content