Palestinian leader Yasser Arafat on Monday reported no progress in weekend talks meant to jump-start the Mideast peace process, but Israeli Prime Minister Benjamin Net-an-ya-hu insisted an accord was possible.

Police stepped up security in Israeli cities after what they said was a failed car bombing Sunday in Jerusalem. Police and soldiers, some with bomb-sniffing dogs, patrolled crowded streets and markets.A Palestinian, described by police as a Hamas activist, was arrested after a fire broke out inside his rented van. The vehicle was filled with flammable materials and bags of nails, police said. The man was hospitalized Monday with severe burns.

The incident created a tense backdrop for Sunday night's talks in Tel Aviv between Defense Minister Yitzhak Mordechai and Ara-fat's aide, Mahmoud Abbas. Senior aides to the two men were to hold another session Monday afternoon.

Arriving Monday in the Gaza Strip, Arafat was asked if there had been progress. "Nothing," he replied.

Netanyahu, however, said an accord on an American initiative for an Israeli pullback from parts of the West Bank was possible.

"We are working together as a team in order to achieve a settlement. As for the Palestinians, we will know in the next few days - very soon - if indeed they have received a similar mandate," the Israeli prime minister said. "If so, it will be brought to a conclusion."

After Sunday's talks, an aide to Mordechai said both U.S. peace envoy Dennis Ross and Netanyahu had been briefed by telephone.

The talks came at the urging of the United States, which urged the sides to negotiate face-to-face after its efforts failed to resolve differences over a U.S. proposal calling for Israel to withdraw from 13 percent more of the West Bank.

Arafat accepted the plan but Netanyahu has balked. After Sunday's meeting, Palestinian security chief Mohammed Dahlan complained that Israeli negotiators had refused to even discuss the U.S. pullout plan.