Israeli Foreign Minister Silvan Shalom said on Wednesday that Ariel Sharon and Ahmad Quraya would meet "if the Palestinians do not put any preconditions" on the encounter.
Shalom was speaking immediately after a one-hour meeting with Egyptian President Husni Mubarak in Geneva.
"It was a very good meeting... I'm very encouraged," he said of their talks, the first encounter between a member of the Israeli government and the Egyptian president since August 2002.
Analysts said Mubarak was expected to use the meeting to urge Shalom to treat Quraya as a genuine partner for peace.
Concerns are growing that Quraya will meet the same fate as his predecessor, Mahmud Abbas, who failed to obtain any concessions from Israel and oversaw the collapse of the US-backed "road map" peace process.
Iran has recently toned down
criticism of Egypt
Meanwhile, it has also been announced on Wednesday that Mubarak will meet Iranian President Muhammad Khatami at the World Information Summit in Geneva on Wednesday.
It will be the first meeting between presidents of the two countries since the 1979 revolution in Iran, officials told Aljazeera.net.
Iran severed diplomatic relations with Egypt after the revolution and criticised it for its ties with Israel, but the two countries have been making placatory noises recently.
Egypt and Iran do not have full diplomatic links, but maintain representative offices in Tehran and Cairo.
The naming of a Tehran street after al-Islambouli, who assassinated Egyptian President Anwar al-Sadat in 1981, has been a major sticking point in Iran's efforts to improve ties with Egypt.
Cairo has said if the street was renamed it would remove a major obstacle to better relations.