Israeli Prime Minister Benjamin Netanyahu said Monday he and Palestinian leader Yasser Arafat had achieved a breakthrough on a long-elusive deal to turn over more West Bank territory.

After meeting with Netanyahu and Arafat at the White House, President Clinton said they had made substantial progress and would meet again in Washington in mid-October to seek a final deal."I believe that we all agreed that we have made progress on the path to peace," Clinton told reporters after an hourlong session with the two leaders in the Oval Office. He described "a significant narrowing of the gaps between the two parties across a wide range of issues."

The two Middle East leaders flew to Washington on Monday following talks that lasted late into Sunday night with Secretary of State Madeleine Albright in New York. After their three-way session in the Oval Office, Netanyahu and Clinton were holding a one-on-one meeting, and Clinton is to meet Arafat separately on Tuesday.

"I think we're getting close to finalizing an agreement and it's time for the leaders to meet," Netanyahu said on NBC's "Today" show before the White House meeting.

In his remarks to reporters, Clinton did not mention details. Earlier, Israeli diplomats, speaking on condition of anonymity, said there was agreement that Israel would withdraw from an additional 13 percent of the West Bank - adding to the 27 percent already promised to the Palestinians.

Three percent would be turned into a nature preserve and kept under Israeli military control, with Israeli and Palestinian construction prohibited.

Clinton cautioned that some obstacles remained.

"There is still a substantial amount of work to be done until a comprehensive agreement can be reached," he said.

The president said he was sending his special Middle East envoy, Dennis Ross, to the region in early October to try to lay the groundwork for a final deal and to prepare for the mid-October meeting at the White House.

"We're going to work at this now and see if we can get it done," Clinton said.

In the Oval Office, Clinton stood between Netanyahu and Arafat in front of an unlit fireplace. They faced a wall of cameras and correspondents yelling questions over each other. Clinton hushed the reporters once for a question.

In his remarks to NBC Monday, Netanyahu spoke of the West Bank withdrawal.

"That's basically the concept we're trying to nail down here, and that's where we've made a breakthrough," Netanyahu said. He said he expected additional talks, "possibly in the near future, and yes, I would perk up your ears."

Israel's acceptance of a U.S. demand that it relinquish another 13 percent of the land it captured in the 1967 Six-Day War cleared a major hurdle to a West Bank agreement with the Palestinians.