Bush is scheduled to address Israeli's parliament on Thursday, the day Palestinians commemorate the Nakba, or "catastrophe", of Israel's creation in 1948, the defeat of five invading Arab armies and the expulsion or flight of more than 760,000 people.
 
Palestinians mark "catastrophe"
 
Thousands of black balloons are set to darken the skies of Jerusalem on Thursday as Palestinians mark their greatest loss.
In depth

 
"To commemorate the Nakba, Palestinians will attempt to turn the  skies over Jerusalem black with 21,915 balloons - a balloon to mark each day of our dispossession," a statement from organisers said.
 
At the same time, a massive demonstration will be held in Ramallah, the West Bank's political capital.
 
"This will be the answer to Bush's speech and the American positions which are hostile to our cause," Omar Assaf, the head of the organising committee, told the AFP news agency.
 
For Israel the anniversary is an occasion to celebrate the achievements of the "Jewish state" since it emerged in the aftermath of the Holocaust - everything from its high-tech economy to its powerful armed forces.
 
Talks overshadowed
 
The Olmert investigation has also overshadowed the US-backed peace talks which Bush hopes will end in a deal on a Palestinian state before he leaves office in January.
 
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"I do believe we can get a state defined by the end of my presidency," Bush told Israel's Channel 10 television.
 
Analysts have said a deal in that timeframe is unlikely but Condoleezza Rice, the US secretary of state, said ahead of the president's visit to Israel that a deal within the next eight months "might be improbable but it's not impossible".
 
At a conference celebrating the 60th anniversary of Israeli statehood, Olmert spoke of "real progress" in the peace talks.
 
"Our talks with the Palestinian Authority are serious and significant," Olmert said in his speech.
 
"There has been real progress, and understandings and points of agreement have been reached in important matters, but not on all the issues."
 
'Serious' negotiations
 
Olmert did not elaborate on what the key issues were and Palestinian officials said the peace process still had a long way to go.
 
"Our negotiations have been serious and in depth, but gaps still exist in all issues. We hope to bridge the gaps," said Saeb Erekat, a Palestinian negotiator in the peace process.
 
Another senior Palestinian official, quoted anonymously by the Reuters news agency, said: "I don't know what kind of progress he's talking about. We still have a long way to go."
 
Some progress has been made on defining the borders of a future Palestinian state, Israeli officials said last week, but not on the more difficult issues of Jerusalem or Palestinian refugees.
 
Meanwhile, as the investigation in allegations of bribery against Olmert continued, police questioned one American businessman in the affair, prior to Tuesday's raid, and a police source said they interviewed two others, including Sheldon Adelson, a casino billionaire.
 
Adelson, who was in Jerusalem as a sponsor of the conference where Olmert made his speech about the "real progress" in the peace talks, was not immediately available for comment.