But Netanyahu has been at odds with Barack Obama, the US president, who has repeatedly called for an end to settlement expansion, in part to improve US relations with the Muslim world, which were damaged by the policies of George Bush, his predecessor.

US-Israeli divide

Netanyahu's government has said construction in existing Jewish settlements would continue to accomodate growing families, despite Obama calling for a comprehensive freeze.

Netanyahu has also refused to endorse the creation of a Palestinian state, a cornerstone of US Middle East policy.

In depth


 Profile: Binyamin Netanyahu
 World awaits Netanyahu speech
 Q&A: Jewish settlements
 Netanyahu on peace
 Riz Khan: The battle over Israeli settlements
 Riz Khan: The future of US-Israeli relations
 Inside Story: Roads and obstacles to peace
 Inside Story: US and Israel poles apart

"I don't think that Netanyahu will use the expression 'two states for two people'," Ofir Akonis, an MP in Netanyahu's Likud party, told Israel Radio.

Netanyahu briefed George Mitchell, US special envoy to the Middle East, and other senior diplomats this week on his planned speech.

But the steps which Netanyahu outlined to Mitchell were "not adequate" to satisfy Washington, a US official told a meeting of the Quartet of Middle East mediators.

Gil Hoffman, chief political correspondent for the Jerusalem Post newspaper, told Al Jazeera that Netanyahu's speech would be a step forward.

"I think that he is going to talks about Israel is willing to take a lot of steps to help out the Palestinian people ... that he would be willing to make withdrawals in the future if the Palestinians have the kind of leadership with both the will and the way to help their own people," he said.
  
"Chances are he will refer to a Palestinian state with some kind of euphemism, whether its endorsing the road map or endorsing some other kind of programme."

Past agreements with the Palestinians bind Netanyahu to a 2003 "road map" that sets out conditions to establish a Palestinian state.

Netanyahu, instead, has attempted to move the focus in talks with the Palestinians from territorial issues to initiatives to improve economic, security and political relations.

"There is no doubt that Netanyahu wants peace and he wants to have a real negotiation for peace and if we will have a true partner we could advance in a real process," Eli Yishai, an Israeli cabinet minister and head of the Shas party, said on Sunday.

"Unfortunately I can't see that the other side wants peace," he said before a cabinet meeting.

Palestinian pessimism

Mahmoud Abbas, the Palestinian president, has said negotiations will be useless unless Netanyahu commits to working towards Palestinian statehood and freezes settlement growth.

Al Jazeera's Ayman Mohyeldin, reporting from Gaza City, said that there was very little focus on Netanyahu's speech in the Palestinian territory.

"Most ordinary people did not know that the Israeli prime minister was going to make a speech ... and when asked say they want concrete steps to lift the siege of the Gaza Strip," he said.

"There was an [newspaper] article today ahead of this speech ... none of the Palestinian factions interviewed for that article showed any kind of optimism that Netanyahu is going to make any kind of significant moves towards the Palestinian people."

The Israeli prime minister is also set to discuss Iran during Sunday's speech, Israeli officials said, whose nuclear aspirations Tel Aviv perceives as a potential threat.