As a result, the adviser said, if any meeting does take place between Abbas and Netanyahu it may be that journalists will not be given permission to record the event, so as to avoid rocking the boat in the Palestinian street.

Further, Obama may deliver a secret letter to the Palestinians making firm commitments in their direction in order to ensure the meeting goes ahead, the adviser suggested, basing his assessment on the actions of previous administrations. The contents of such a letter would only become apparent to Israel at a later date, he added.

The Obama team is keen for the meeting to go ahead because of the tough situation Obama is currently facing both domestically and in other key foreign-policy areas, the adviser concluded.

For the Americans the settlements issue is really "foreplay", said Akiva Eldar, a veteran columnist with the leading Israel daily Ha'aretz, when speaking with Xinhua. The argument over the length of a settlement freeze is merely a sideshow and agreement will likely come, he said.

The real discussions lie ahead and will be far more problematic to resolve, such as the fate of Jerusalem and the Palestinian refugees, said Eldar. Here he sees an inconsistency that may plague Israeli-Palestinian relations in the short term.

The well informed Eldar believes the US may well be giving separate and contradictory messages to Israel and the Palestinians regarding Jerusalem.

"The Americans have decided to push ahead with the process and in order to do so they're giving something to Israel and something to the Palestinians," he said.

The Israelis have been told that negotiations with the Palestinians, once they resume, will not initially focus on refugees and Jerusalem. Israel perceives Jerusalem is its indivisible capital, while the Palestinians insist the capital of their future state will be located in East Jerusalem.

The Palestinians will be told by Washington that there will be recognition of a Palestinian state or entity within two years, with the 1967 borders as the basis for negotiations, "which means the division of Jerusalem," said Eldar.

These are the truly divisive arguments, rather than a disagreement between Israel and the U.S. on whether there is a settlement freeze for six months or a year, Eldar added.

Busy week for Isralei diplomacy

As Mitchell was meeting other Israeli government ministers on Sunday, Netanyahu was in Egypt for talks with President Hosni Mubarak. The Mubarak team is proving to be a key partner for Washington as it tries to advance an Israeli-Palestinian agreement.

Netanyahu said he hopes he can persuade the Arab world to engage Israel as an incentive for Israel to move towards a deal with the Palestinians.

While some in the Arab world have shown willingness, some other like the Saudis are insisting any normalization should only follow a final-status agreement between Israel and the Palestinians.

Meanwhile, Israel's Deputy Foreign Minister Danny Ayalon is headed for Washington and talks about upping the level of ongoing strategic talks between the countries.

It is reported that from now on these negotiations that focus on a variety of bilateral issues will be held at the level of foreign ministers.

Israel's Finance Minister Yuval Steinitz is also in the United States this week. His key concern is Iran. Steinitz is working to persuade the Obama administration to impose far stronger economic sanctions against Iran at the U.N. Security Council.