The US embassy confirmed the talks between Jason Greenblatt and leaders of the Israeli settler movement took place in Jerusalem as part of the White House official's wide-ranging meetings this week.
The Yesha Council, the main Israeli settler organisation, said it was believed to be the highest level official meeting ever for the organisation with a US administration.
The meeting was attended by Yesha leaders Oded Revivi and Yossi Dagan, the group said.
"Representatives from Yesha have met with (former US secretary of state) John Kerry and others on the sidelines of events, but we have not had official meetings like this," a spokesman said.
"The previous administration never met like this."
Israeli settlements in the occupied West Bank are considered illegal under international law and major obstacles to peace as they are built on land the Palestinians see as part of their future state.
Israeli settlement expansion has been the subject of harsh international criticism, with many warning it is gradually eating away at prospects for a two-state solution, the basis of years of negotiations.
Last week, British foreign minister Boris Johnson met with anti-settlement NGO Peace Now during a visit to Israel and the Palestinian territories.
Israeli settler leaders had also called for Johnson to meet with them, but a British embassy official said the brief visit allowed no time to do so.
Greenblatt, Trump's special representative for international negotiations, has met a range of people on both the Palestinian and Israeli side during his visit this week, including Israeli Prime Minister Benjamin Netanyahu and Palestinian president Mahmud Abbas.
Abbas and Trump spoke for the first time by phone last week, and the Palestinian leader said Thursday he believed peace was possible.
"Our hope is that those contacts result in the end in a peace that is led by the United States and the international community," Abbas told journalists in Ramallah.
Greenblatt was due to meet Netanyahu again on Thursday.
New settlement pledge
The peace process has been deadlocked since April 2014.
Greenblatt's visit comes after Trump cast uncertainty over years of international efforts to foster a two-state solution to the conflict when he met Netanyahu at the White House last month.
At that meeting, Trump broke with decades of US policy by saying he was not bound to a two-state solution to the conflict and would be open to one state if it meant peace.
Netanyahu said Thursday he was in discussions with Trump's administration on ways to move ahead with settlement construction.
He also reiterated he intended to build a new "community" for residents of a wildcat Jewish outpost in the occupied West Bank known as Amona, evacuated under court order in February.
An Israeli government-sanctioned settlement would be the first official new settlement in more than 20 years and would surely draw intense international criticism.
Construction in recent years has involved expanding existing settlements in the West Bank.
"We are in the midst of a process of dialogue with the White House and our intention is to reach an agreed-upon policy regarding settlement construction," Netanyahu said.
Predecessors stumped
US president Barack Obama's administration frequently criticised Israel over settlement construction.
Obama's White House also declined to veto a UN Security resolution condemning Israeli settlement building in December, deeply angering Netanyahu.
Greenblatt's visit to the region marks the Trump administration's dive into the decades-old Israeli-Palestinian conflict, which the new US president said he intended to resolve.
Many have questioned Trump's ability to pull off the feat that stumped previous administrations, especially with newly appointed advisers such as Greenblatt having no experience in Middle East diplomacy.
An Israeli analyst agreed that Greenblatt's meeting with settler leaders was unusual, but said he did not disagree with it.
"I think what Jason Greenblatt is doing is to consult with all kinds of political forces," Eytan Gilboa, an expert on Israeli-US relations with the Begin-Sadat Centre for Strategic Studies, told AFP.
"I think it's a good thing he met them. He could have met Hamas as well as far as I'm concerned to see what they think about negotiations with Israel," he added, referring to the Islamist movement that runs the Gaza Strip and refuses to recognise Israel.
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