Palestinian leader Yasser Arafat met US President Bill Clinton in Washington on Tuesday and said he had accepted a compromise plan for a second Israeli troop withdrawal in the West Bank. But US officials said tough issues remain unresolved. "It was a fruitful and encouraging meeting," White House Press Secretary Mike McCurry told reporters. Clinton met Arafat and Israeli Prime Minister Binyamin Netanyahu jointly on Monday and invited them to return in about two weeks for a summit designed to nail down the timetable for the troop pullout. "I think the president is determined to see an agreement arise from this exercise," McCurry said of the high-profile US bid to end a stalemate that has lasted more than 18 months. With momentum towards an accord growing, Clinton and Arafat were looking ahead to a time when the United States may be able to "engage formally" with the Palestinians, McCurry said. He explained that the two leaders "talked at some length about the arrangements that will exist when the United States can engage formally with the Palestinian Authority." That, he said, may involve establishing a joint committee that "could actually, formally work on, in effect, bilateral relations." In an attempt to bridge the impasse in Palestinian-Israeli negotiations, Washington has proposed that Israeli troops withdraw from 13 per cent of West Bank territory -- a figure that Israel at first rejected. Under the latest compromise version, Israel would withdraw from 13 per cent of the land if three per cent of it was set aside as a nature reserve that could not be developed by either side. In return, security measures would be stepped up by the Palestinians. Arafat emerged from his talks with Clinton on Tuesday to say he has accepted the idea of creating a preserve, provided Palestinians and Israelis are jointly responsible for security. "We have accepted it, but security has to be according to Area B," Arafat said, citing the terms of a 1995 agreement that would place civil control of an area in the hands of the Palestinian Authority while Israel maintained military responsibility. Reuters quoted US administration officials as saying the Israelis have also agreed to the idea of sharing security responsibilities. McCurry, asked about Arafat's statement to reporters, said: "It is not surprising that, publicly, the chairman would address certain aspects of the negotiation in a way that would help him as he negotiates." He predicted that both sides are "going to be doing a lot of things and saying a lot of things that will enhance their own ability to bargain for those things that they care about." Arafat, asked if an accord would be signed at the summit planned for mid-October, said: "We hope so." Stressing that nothing is settled until all negotiations are complete, a senior official said: "There is a long way to go, and folks can backtrack." Secretary of State Madeleine Albright and special Middle East envoy Dennis Ross will go to the Middle East for additional talks next week. The problems in reaching an agreement were underscored on Tuesday when a Palestinian was killed and two brothers were injured when a car exploded in a Palestinian-ruled area of the West Bank. Palestinian police said they were investigating the possibility that the car was being prepared for a suicide attack in Israel. Netanyahu has made progress in peace talks with Arafat conditional on a Palestinian crackdown on Islamist militants. Palestinian negotiator Saeb Ereikat said Arafat assured Clinton that he would try to counter terrorism against Israel. "He will exert every possible effort," Ereikat said. AP said that with the territorial issue basically resolved, the focus of US mediation has shifted to whether Arafat can satisfy Netanyahu's demands to disrupt terrorist cells on Palestinian-held land, confiscate weapons from militant groups and have the Palestine Liberation Organisation strike all anti-Israeli references from its covenant. A White House official told reporters that the Palestinian leader had reviewed with Clinton his speech on Monday to the UN General Assembly in which Arafat called for an end to terrorism. (see p.6)