Israeli Prime Minister Benjamin Netanyahu may endorse plans for an independent Palestinian entity when he visits the United States on Monday, according to Israel's defence minister.
The U.S. has long pushed for a Palestinian state to help end violence in the region, but Netanyahu has been reluctant to back the plan.
On Saturday, Defence Minister Ehud Barak told Israel's Channel 2 TV he believes Netanyahu will change his position when he meets with U.S. President Barack Obama in Washington.
However, he avoided using the word "state."
"I think and believe that Netanyahu will tell Obama this government is prepared to go for a political process that will result in two nations living side by side in peace and mutual respect," Barak said Saturday.
Barak also said he believes Israel and the Palestinians will be able to formalize a two-nation plan within three years.
There appears to be growing momentum towards a new push for a Palestinian state. Earlier this month, King Abdullah of Jordan said the U.S. was readying a new "combined approach" on the matter that would aim for broad peace among Israelis, Palestinians and the broader Arab world.
Obama is scheduled to deliver a speech on June 4 in Egypt, and may use the opportunity to present such a plan.
Last week, Pope Benedict XVI made a pilgrimage to the area and called for the creation of a Palestinian state. But his message was largely drowned out by criticism over a speech he gave on the horrors of the Holocaust.
Local media criticized the Pope for avoiding the words "murder" or "Nazis" when he spoke at Yad Vashem, Israel's national Holocaust memorial.
In the past, Netanyahu's skepticism about the feasibility of an independent Palestinian state has caused friction between Israel and the U.S. over Mideast peace efforts. He has also been open to attacks on Iran if that country tries to develop nuclear weapons.
U.S. Vice-President Joe Biden has called Netanyahu's position on Iran "ill-advised." And recent Israeli reports claimed CIA Director Leon Panetta secretly visited Israel this month, hoping to get advance warning for any possible strikes on Iranian nuclear facilities.
With files from The Associated Press