The Archbishop of Canterbury Dr Rowan Williams has held talks with Israeli President Shimon Peres in Jerusalem during a visit to the Middle East, BBC reported.
They discussed the role of Christian schools and hospitals in Israel and the Palestinian territories, and the contentious issue of water-sharing.
The two men also talked about the importance of inter-faith dialogue.
Dr Williams also met Christian and Jewish leaders, and visited the Yad Vashem Holocaust memorial.
He is on a four-day tour of Jordan, Israel and the Palestinian territories.
On the third day of his visit, Dr Williams held meetings with the heads of the Latin, Armenian and Greek Orthodox churches - Theophilus III, Greek Orthodox Patriarch of Jerusalem, Torkom II, Armenian Patriarch of Jerusalem, and Fouad Twal, Latin Patriarch of Jerusalem.
He also led the latest talks with the Chief Rabbis of Israel.
The Archbishop's office said the meeting "was characterised by a deepening sense of trust and openness, and a growing determination to work towards a greater mutual understanding between the faiths".
After visiting Yad Vashem, Dr Williams held a 40-minute meeting with Mr Peres.
They discussed the current state of relations between Israel and the Palestinian territories, and a range of environmental issues including water.
Last year, a World Bank report blamed Palestinian mismanagement and Israeli restrictions for severe water shortages in Palestinian areas.
Palestinians get only a quarter of the water Israelis have access to.
Dr Williams is being accompanied throughout his visit by the Rt Rev Bishop Michael Jackson, the Anglican chair to the Anglican-Jewish Commission.
Archbishop of Canterbury meets Israeli President Peres
