The meeting came as the newly appointed Palestinian Prime Minister, Mahmoud Abbas, also known as Abu Mazen, moved closer to naming his government. A new Cabinet is a requirement for a U.S.-backed "road map" for peace to be unveiled.
"We had a very good meeting with Arafat, and he is fully committed to the peace process," said U.S. Rep. Darrell Issa, a Republican from California. "There is a road map that has been worked out ... and we should now pursue peace."
Issa was joined by U.S. Rep. Nick Rahall, a Democrat from West Virginia, and Maurice Hinchey, a New York Democrat. The U.S. congressmen were meeting with other Palestinian leaders Thursday but it was unclear whether they would see Abbas.
Last June, President Bush followed Israel's lead, boycotting talks with Arafat and saying Palestinian statehood was dependent on his resignation.
Senior Palestinian leaders on Thursday said major differences were being ironed out on new Cabinet posts and an announcement was expected Sunday.
"Progress has been made and we expect to conclude discussions by Saturday," said Palestinian planning minister Nabil Shaath. "Abu Mazen will present his government to the Palestinian Legislative Council by Sunday."
In interviews published Wednesday, Israeli Prime Minister Ariel Sharon said Abbas must be given broad powers, and that Arafat must not be the one still "pulling the strings." Sharon has been campaigning to sideline Arafat.
In the West Bank, meanwhile, Israeli troops shot and killed a 16-year-old Palestinian boy Thursday in Tulkarem, witnesses said.
Palestinian residents said the boy, Yousef Yahiya, was throwing stones at troops who shot him in the back. The army said the boy was throwing homemade petrol bombs. He was declared dead shortly after arriving at the hospital.
In the Gaza Strip, Israeli tanks and bulldozers entered the neighborhood of Berka near Deir Al Balah and surrounded several houses. Demonstrators threw stones at the soldiers, who fired back. Three Palestinians were injured.
The operations came as Israel maintained closures in the West Bank and Gaza, saying it received warnings there could be attacks during the Jewish holiday of Passover, which began on Wednesday and lasts a week.
Roadblocks were erected to keep Palestinians from entering Israel. Some of the barriers, however, kept students from getting to school and farmers from reaching market with their produce.
Last year, a Palestinian suicide bomber blew himself up in a hotel in the Israeli seaside resort of Netanya during a Passover meal, killing 29, the bloodiest single Palestinian attack in 30 months of conflict with the Israelis.
By Ibrahim Hazboun