US President Barack Obama is "impressed" with the talks he had with Israeli Prime Minister Benjamin Netanyahu over Israel's relations with Palestine, said US Secretary of State John Kerry.
Kerry, who was on a surprise visit to Iraq, added that Obama's three-day trip to the Middle East was a "good beginning".
The top aide said: "We have to keep working at this. We've just begun those discussions. I wouldn't characterise them in any way except open, candid, and a good beginning."
He added: "I know from the president, before he left, that he was very impressed by the discussions he had. The stage has been set for the possibilities that parties can hopefully find a way to negotiations."
Kerry said that the US president's latest trip was "historic in every aspect" and added: "I know that the folks in Israel felt its impact."
The top diplomat also met Netanyahu and Palestinian President Mahmoud Abbas over the weekend.
However, he sounded cautious on peace prospects in the region saying: "Expressing optimism when you don't even have negotiations would be foolhardy. I have hope that the president's words kindled a sense of the possible in the people of Israel and the region and the Palestinians. He has charged me and others with the responsibility of trying to find out what the way forward is."
It was earlier speculated that Kerry would try to bring together leaders from Israel, Palestine and Jordan for a meeting moderated by US officials.
Although there is no official confirmation yet, reports suggest that high-level talks might take place in the coming months.
Kerry also used the opportunity in Baghdad to voice concern over Iranian planes carrying weapons for Syria overflying Iraq.
Urging Baghdad not to turn a blind to the alleged arms supply, Kerry said: "I made it very clear to the prime minister that the overflights from Iran are in fact helping to sustain President Assad and his regime. I made it very clear that for those of us who are engaged in an effort to see President Assad step down... anything that supports President Assad is problematic."
Iran says its planes only carry humanitarian aid.