In a statement after the two leaders met Wednesday at the Elysee Palace, Sarkozy also called on Netanyahu to ease movement restrictions on Palestinians living there.
Sarkozy and Netanyahu also discussed kidnapped soldier Gilad Shalit and Iran.
Speaking after the meeting, Netanyahu said, "I have already said that we will not build [new] settlements or expand the existing ones, but we are seeking to allow the people living there to live,” according to Ynet.
Sarkozy called for the release of Shalit, who was captured by Hamas in a cross-border raid near Gaza in June 2006. Shalit is a French national.
“He has been missing for three years, held in some pit or other, and no one knows how he is,” Netanyahu said after the meeting. “Please raise your voices for Gilad Shalit.”
Netanyahu called Sarkozy “a friend of Israel and a friend of peace,” according to Ynet.
The leaders also talked about ways to relaunch the stalled peace process, according to a statement from the Prime Minister's Office.
Netanyahu added that he and Sarkozy agreed that Iran should not be allowed to acquire nuclear capabilities, saying after the meeting that a "more moderate policy in Iran could bring peace."