Israel has insisted work will continue on a controversial barrier separating much of the West Bank from Israel and Jewish-settled areas, despite recent criticism from the US.
The emphasis was firmly on Israel's security
Prime Minister Ariel Sharon told US President George W Bush the barrier - which the Palestinians call a "wall" - was necessary for Israel's security.
Mr Sharon's Washington talks come only days after a visit there by a Palestinian leader - not Yasser Arafat, who has never been invited by the Bush administration, but Prime Minister Mahmoud Abbas.
The meetings were seen as an attempt by the US to push forward its "roadmap" plan to bring peace to the region which appears to be faltering.
The plan has resulted in relative calm after a ceasefire by Palestinian militant groups and a pull-back by Israeli forces from some Palestinian areas, but few people are convinced it can last.
Mr Bush praised the steps towards peace taken so far by Israeli and Palestinian leaders, including Israel's release of hundreds of Palestinian prisoners not directly linked to militant attacks.
But he warned that both sides, and Arab governments in the region, had much to do to secure a lasting peace and the creation of a viable Palestinian state.
Although the Bush-Sharon meeting was billed as one at which the White House would pile the pressure on Mr Sharon, the BBC's Rob Watson in Washington says publicly at least, any pressure was applied decidedly gently.
Mr Bush has previously criticised the barrier project as an obstacle to the implementation of the roadmap, which envisages the creation of a Palestinian state.
But on Tuesday he also emphasised Israel's security.
"I would hope that in the long term, a fence would be irrelevant. But look, the fence is a sensitive issue.
"My promise to him [Ariel Sharon] is we'll continue to discuss and to dialogue how best to make sure that the fence sends the right signal, that not only is security important, but the ability for Palestinians to live a normal life is important as well, " Mr Bush said.
The Israeli Government sees the barrier as a way of preventing militant attacks on Israel and Jewish settlements in the West Bank, while Palestinians say it is an attempt to grab land and destroy their dreams of statehood.
The US president again called on the Palestinians to take action against the militants.
"The Palestinian Authority must undertake sustained, targeted and effective operations to confront those engaged in terror and to dismantle terrorist capabilities and infrastructure."
Standing by Mr Bush's side in the White House rose garden, Mr Sharon said that while he would not stop building the fence, steps would be taken to minimise its effects on ordinary Palestinians.
And he said he was grateful for every hour the ceasefire by Palestinian militant groups lasted.
But he added: "We are concerned that these... will be shattered any minute as a result of the continued existence of terror organisations which the Palestinian Authority is doing nothing to eliminate or dismantle."
ROADMAP MAIN POINTS
Phase 1 (to May 2003): End to Palestinian violence; Palestinian political reform; Israeli withdrawal and freeze on settlement expansion; Palestinian elections
Phase 2: (June-Dec 2003) Creation of an independent Palestinian state; international conference and international monitoring of compliance with roadmap
Phase 3 (2004-2005): Second international conference; permanent status agreement and end of conflict; agreement on final borders, Jerusalem, refugees and settlements; Arab states to agree to peace deals with Israel
His comments were later dismissed by Palestinian Information Minister Nabil Amr as "entirely negative".
"This means there are big obstacles in the way of the peace process and the implementation of the roadmap," he said.
There has been a month of relative calm since the ceasefire began.
However the BBC's James Rodgers in Jerusalem says that despite the calls by the Israel and US leaders for the "terrorist infrastructure" to be dismantled, the Palestinian Authority remains reluctant to confront the militants head on.