WASHINGTON (AP) _ Declaring a need to move ``fairly quickly,'' President Clinton is trying to set up a U.S.-run meeting between Israeli Prime Minister Benjamin Netanyahu and Palestinian leader Yasser Arafat to revive Middle East peace talks, U.S. and Palestinian sources said today. ``It was encouraging,'' Arafat said after he saw Clinton.

Sitting down with Arafat two days after a similar session with Netanyahu, Clinton said, ``I'm convinced we can make some progress.''

Under the proposal, Secretary of State Madeleine Albright would mediate between Netanyahu and Arafat at a still to be determined site in Europe, hoping to close a deal based on a large Israeli pullback on the West Bank, in phases linked to Palestinian moves against terrorism.

Saeb Erekat, a senior adviser to Arafat, said some of the wide gaps between the Israelis and the Palestinians would have to eased before the two leaders met. He anticipated several interim, separate meetings, brokered by the United States.

``I don't think they'll have face-to-face until they can have a successful face-to-face. No one wants a failure,'' he said.

Arafat told reporters the Palestinians were entitled to another 60 percent of the West Bank under agreements with Israel. That would be in addition to the 27 percent Israel already has turned over, along with Gaza.

He said he had turned over to Clinton a letter specifying steps taken by the Palestine National Council to annul calls for Israel's destruction and said Netanyahu had blocked implementation of a security measure approved by the Central Intelligence Agency.

``I hope that Mr. Netanyahu will understand that peace is not only a Palestinian need. It's an Israeli need, it's a Palestinian need, it's an Arab need, it's an international need,'' Arafat said. ``And I hope that Mr. Netanyahu will turn his words to deeds and comply with the agreements.''

Arafat and Clinton were expected to meet again tonight.

Opening up the early meetings, Clinton said, ``I want to emphasize what a critical time this is in the process and the importance of both parties meeting their obligations.''

Bringing the two leaders together, with Albright directing their discussions, would step up U.S. involvement in the dispute between Israel and the Palestine Authority. Arrangements are being discussed in the hope a meeting in February can be set up, said the U.S. and Palestinian sources, speaking on condition of anonymity.

Albright, who made one trip to the Middle East last year and said she would not go back just to ``tread water,'' met twice separately in Europe with Netanyahu and Arafat.

``We believe the Oslo process sets out a schedule for redployment,'' Clinton said.

Arafat came to Washington saying he was ``not asking for the moon.''

``I am asking for what was signed at the White House,'' Arafat said before calling on Clinton. Referring to an interim agreement he reached with Israel in 1995, Arafat is insisting on a big pullback of Israeli forces _ 60 percent, he told reporters in the White House driveway.

Netanyahu, on the other hand, said getting more territory depends on the Palestinians taking tougher measures against terrorists and the Palestine National Council publicly annulling calls for Israel's destruction.

He told reporters here before going home that he had not given the president ``any percentages.''

Even so, the Israeli newspaper Haaretz said Netanyahu had told Clinton he would withdraw troops from 10 percent of the West Bank, but would forgo other pullbacks he had promised the Palestinians.

The newspaper said Clinton said the Palestinians were willing settle for a 15 percent withdrawal, half their initial demand.

Netanyahu, in a windup speech Wednesday, said his message to Arafat was: ``You haven't done anything, and you ask us to give up additional territory to be bases for terrorism.''

The prime minister said 250 Israelis were killed in terrorist attacks since the first interim agreement was signed with Arafat in 1993 _ more than were slain in the previous decade.

And now, he said, TNT is being produced for bombs in each of the West Bank towns Israel surrendered to the Palestine Authority.

``We'll not ever be pressured into jeopardizing our security,'' Netanyahu said after meeting with congressional leaders.

Still, Netanyahu enjoyed his talks with Clinton and characterized them as open and friendly, he said on CNN's ``Larry King Live'' program before his departure. He said he discussed with Clinton ways to bridge the concerns of both leaders.

``He said let's figure out a way to weave the two: Palestinian compliance and the Israeli redeployment. ... We haven't finished that job,'' Netanyahu said.

In a PBS interview, Clinton said he had narrowed differences between the prime minister and Arafat enough to look for ``some way we can put them together'' to work out a settlement.

``And I'm very hopeful, because I think it's not good for them to keep on fooling with this and not making progress,'' Clinton said.

State Department spokesman James P. Rubin signaled, meanwhile, that the president might put some heat on Arafat.

``He needs to understand the linkage between any movement forward by the Israelis and the question of security,'' Rubin said.