Egypt's state-owned news agency reported that the two discussed Cairo's stance, which is that "the conditions necessary for the actualization of the two-state vision must be prepared".
The meeting lasted over two hours, with the intermittent participation of Egyptian intelligence chief Omar Suleiman and Netanyahu aides Uzi Arad and Yitzhak Molcho.
"President Mubarak represents the aspiration to expand the circle of peace and maintain stability and security for all of the region's people. Once again, I find in him a partner for the achievement of these important goals," Netanyahu said after the meeting.
But Egyptian Foreign Minister Ahmed Aboul-Gheit was less optimistic. He said the conditions for moving to direct peace talks were still "lacking".
Earlier Mubarak met with Palestinian President Mahmoud Abbas and the US's special envoy to the Middle East, George Mitchell.
Egypt's news agency reported that Mubarak spoke with Abbas about the terms necessary for the implementation of the two-state solution, as well as recent meetings between the Palestinians and US officials on the subject.
The reports said he was to travel to Germany to receive medical treatment, but state-owned television insisted on showing live broadcasts of the president in an area north of Cairo.
Roni Sofer contributed to this report
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