Prime Minister Theresa May has announced a judge-led public inquiry into the disaster.
He insisted the Government had acted on safety recommendations after an earlier fire in London in 2009, but it would wait for the public inquiry's findings before making any changes in regulation.
The meeting is unlikely to quell complaints that May has been slow to reach out to fire survivors, despite her announcement of a $6.4 million emergency fund to help the displaced families.
Cladding used on Grenfell Tower is banned in Britain, the chancellor has said, as government staff were drafted in to handle the response to the disaster.
Mr Khan said the local community was "frustrated" and "angry" in the wake of the blaze after he attended a church service near the tower block in west London. He went on to say, "The tragedy we're seeing is because of the consequences of mistakes and neglect from the politicians, the council and the government".
Mr Hammond also suggested that in the days since the fire the government had been given advice that retro-fitting the type of sprinkler systems that were missing from Grenfell Tower is not always the best course of action, in contradiction to statements made by the Fire Brigade Union and in the report into the Lakanal House fire in 2013, which killed six people in South London.
Khan is London's first Muslim mayor.
The 1974-built concrete tower had recently been fitted with new exterior insulation cladding, which many locals blame for spreading the inferno so quickly.
Police said they have recovered 16 bodies as crews continue to search the building.
Reports suggest that a renovation project on Grenfell Tower previous year intentionally did not include safety devices such as sprinklers and doors created to keep the fire from spreading.
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A spokesman for the Department for Communities and Local Government told CNN that the use of a composite aluminum panel with a polyethylene core would breach current United Kingdom building regulations guidance, which says this material should not be used as cladding on buildings over 18 meters (59 feet) in height.
Police and fire experts have said the fire was so intense that the process of identifying human remains will take weeks, if not months - and some victims may never be found. Police say at least 58 people are either confirmed or presumed dead, with the figure likely to rise in coming days.
"Occupy it, compulsory purchase it, requisition it - there's a lot of things you can do", he said.
Other victims have been named by their families.
She also says she will receive daily reports from the stricken neighborhood.
There has been a public outcry at the government's initial failure to provide up-to-the minute information.
Labour Party lawmaker David Lammy demanded that the government and police immediately seize all documents relating to Grenfell's renovation to prevent the destruction of evidence that could show criminal wrongdoing.
John Cowley, managing director of CEP Architectural Facades, which produced rainscreen panels and windows for Grenfell Tower's cladding sub-contractor Harley Facades Ltd, said: "Reynobond PE is not banned in the UK".
He also sidestepped questions over whether he felt guilty about the tragedy, telling BBC Radio 4's The World At One: "I feel awful about the whole position we find ourselves in".