United State President Donald Trump last June ordered Special Counsel Robert Mueller fired but backed down after the White House Counsel Donald McGahn threatened to resign rather than follow his directive, the New York Times reported yesterday, citing four people told of the matter.

White House lawyers and press officials did not immediately reply to Reuters requests for comment.

Mueller, who is investigating allegations of Russian meddling in the 2016 US election, learned of the incident in recent months as his investigators interviewed current and former senior White House officials in an inquiry into whether the President obstructed justice, the Times reported.

Amid media reports that Mueller was looking into a possible obstruction case, Trump argued that the former FBI director had three conflicts of interest that disqualified him from overseeing the probe, two of the people said, according to the Times report.

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First, Trump said that a dispute years ago over fees at Trump National Golf Club in Sterling, Virginia, had led Mueller to resign his membership, the newspaper reported.

The President also said Mueller could not be impartial because he had most recently worked for a law firm that previously represented the President's son-in-law, Jared Kushner.

Trump also said Mueller had been interviewed to return as the director of the FBI the day before he was appointed special counsel in May, the Times reported, citing the two people.

McGahn said he would quit rather than follow through on the order to fire Mueller, the Times reported, citing the people.

Special Counsel Robert Mueller. Photo / AP
Special Counsel Robert Mueller. Photo / AP

McGahn disagreed with the President's case for dismissing Mueller and told senior White House officials that firing him would have a catastrophic effect on Trump's presidency and raise questions about whether the White House was trying to obstruct the Russia probe, according to the people cited by the Times.

McGahn also told White House officials that Trump would not follow through on the dismissal on his own, and the President then backed off his demand, according to the people, who the Times said spoke on condition of anonymity because they did not want to be identified discussing a continuing investigation.

Mueller was appointed special counsel in May by the Justice Department after Trump fired FBI director James Comey, who was leading the agency's Russia investigation. Russia has denied any meddling and Trump has denied any collusion.

Comey's firing is central to whether Trump may have committed obstruction of justice.

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Trump said on Thursday that he would be willing to be interviewed under oath by Mueller, and according to sources with knowledge of the investigation, Trump's lawyers have been talking to Mueller's team about an interview.

Meanwhile, a document released by Trump lawyer John Dowd says Mueller has interviewed more than 20 White House employees.

New hope for 'Dreamers' and new threat for Palestinians

The document details what the White House calls its unprecedented co-operation with Mueller's investigation, and says it has turned over more than 20,000 pages of records. The President's 2016 campaign has turned over more than 1.4 million pages.

President Donald Trump is proposing a plan that provides a path to citizenship for 1.8 million of the so-called "Dreamer" immigrants at home, while at the World Economic Forum in Davos, Switzerland, he has threatened to stop US aid to the Palestinians.

Trump's citizenship plan would include tighter restrictions on legal immigration and US$25 billion ($34b) in border security, the White House said, putting forward an outline likely to find resistance from some of Trump's conservative allies and deep opposition from immigration activists.

Senior White House officials offered a preview of Trump's immigration framework yesterday, casting it as a compromise that could pass the Senate. The proposal represents a reversal for the President, who once promised to eliminate an Obama-era programme protecting immigrants brought to the US as children and now in the country illegally. He later urged lawmakers to extend the programme, but maintained he was not considering citizenship.

The Obama-era Deferred Action for Childhood Arrivals programme currently covers roughly 690,000 of those younger immigrants — about half the number who qualify for the programme, according to independent estimates. Trump's plan would expand this further by adjusting some of the requirements, officials said, but they would not offer specific details. It would not allow parents of those immigrants to seek lawful status, the officials said.

In Davos, Trump met Israeli Prime Minister Benjamin Netanyahu for the first time since he said he would recognise Jerusalem as Israel's capital and move the US embassy there. The declaration delighted Netanyahu and outraged Palestinians, who declared a new US-led peace push dead and refused to meet Vice-President Mike Pence during his recent visit to the Middle East.

"They disrespected us a week ago by not allowing our great Vice-President to see them and we give them hundreds of millions of dollars in aid and support," Trump said of the Palestinians. "That money is not going to them unless they sit down and negotiate peace," he said.

- Reuters, AP