US Secretary of State John Kerry held new talks with Palestinian president Mahmoud Abbas on Wednesday in a dogged bid to kick-start the moribund peace process.
Kerry urged Israel on Wednesday afternoon to carefully consider a 2002 peace initiative approved by the Arab League.
"Israel needs to look hard at this initiative, which promises Israel peace with 22 Arab nations and 35 Muslim nations - a total of 57 nations that are standing and waiting for the possibility of making peace with Israel," he said in Amman, where he met officials from Arab League member countries.
The plan, put forward by Saudi Arabia at an Arab League summit in Beirut in 2002, offered full recognition of Israel but only if it gave up all land seized in the 1967 Middle East war and agreed to a "just solution" for Palestinian refugees. Softening the plan three months ago, a top Qatari official raised the possibility of land swaps in setting future Israeli-Palestinian borders.
Kerry has sought to ensure that any new peace process would have the backing of the Arab League states, which, if they were to offer Israel a comprehensive regional peace, could provide a strong incentive for Israeli compromise.
A State Department official said the Kerry and Abbas "will meet again this afternoon", without giving further details.
The latest developments came after the two men met into the early hours of Wednesday over a traditional iftar Ramadan meal in Amman lasting for some five hours.
Abbas is to inform the PLO leadership about the US plan to resume peace talks on Thursday in order to decide whether to take part, a Palestinian official told Reuters.
"The president will present the offer made to him by Mr. Kerry in order to make a decision about it," Wasel Abu Youssef, a Palestine Liberation Organization (PLO) official, told Reuters in Ramallah of Abbas's plan to brief PLO colleagues.
Abu Youssef gave no details of the purported proposal.
Kerry is on his sixth visit to the region as he seeks to persuade the Israelis and Palestinians to resume direct negotiations which broke down almost three years ago.
A Palestinian official, who asked to remain anonymous, told AFP things were moving and Kerry was "determined" to announce a resumption of talks before he leaves the region at the end of the week.
"There has been progress in meetings with Kerry after he presented his initiative to Palestinian president Mahmoud Abbas in a meeting in Amman," the high-ranking official said.
"The US secretary of state is determined to announce, before he leaves on Friday, a restart of negotiations," he added.
But State Department officials have remained tight-lipped on the substance of the two men's talks in line with what Kerry has dubbed his "quiet strategy".
"They continued the conversation they have been having for the last few months and touched on recent developments," a senior State Department official said in a statement.
The two men also "discussed details of an economic plan that would help bolster the Palestinian economy" by attracting some $4 billion (3.04 billion euros) in private investment into the territories.
Kerry earlier on Wednesday briefed a delegation from the Arab League peace initiative on his progress and ideas for resuming the talks stalled since September 2010.
However, his visit comes amid Israeli anger over new European Union guidelines barring the 28-member bloc from funding projects in Jewish settlements.
Netanyahu convened an emergency meeting Tuesday after the EU approved the guidelines which will affect all grants, prizes and funding from the union from 2014 onwards, with none made available to Israeli entities beyond the 1967 Green Line.
Israeli officials said the EU move could prove a stumbling block to Kerry's diplomatic efforts.
And indeed there are no immediate plans for Kerry to meet Prime Minister Benjamin Netanyahu, unlike previous trips when he has shuttled back and forth between Amman and occupied Jerusalem.
In comments to the German newspaper Welt am Sonntag released on Wednesday, Netanyahu said the EU policy marked "the attempt to forcibly determine Israel's borders through economic pressure instead of through negotiations."
He said such a move was wrong, adding that "it hardens the Palestinian position and leads Israel to lose faith in Europe's neutrality."
The Palestinians are refusing to return to negotiations without a freeze on settlement activity and Israel's acceptance of the 1967 lines as the basis for final status negotiations. Netanyahu has called those boundaries indefensible for Israel, and the Jewish state has stated that it wants talks, but without "preconditions."
Despite efforts by Kerry to revive peace talks, Israel has greenlighted the construction of hundreds of settlement homes in the past several months
Israel's settlements in the West Bank and East Jerusalem are considered illegal under international law.
Kerry also discussed the upheaval in Egypt and the conflict in Syria with the Arab League leaders at their meeting at the foreign ministry in Amman.
Cairo was represented by ambassador Amr Aboul Atta, Egypt's permanent representative to the United Nations.
Arab League chief Nabil al-Arabi was also present along with Palestinian foreign minister Riyad al-Malki, and ministers and top officials from Bahrain, Jordan, Kuwait, Morocco, Qatar, Saudi Arabia and the United Arab Emirates, the US State Department said.
Kerry is also mulling a visit to a Syrian refugee camp in Jordan, which would make him the most senior member of the US administration to see first hand the tragedy of the conflict now in its third year.
Jordan is hosting some 550,000 refugees who have fled the fighting as Syrian President Bashar al-Assad seeks to subdue a rebellion against his rule.
The United Nations said on Tuesday that 5,000 people a month are dying in the war which has now triggered the worst refugee crisis since the 1994 Rwandan genocide.
Nearly 1.8 million people are registered as refugees living in countries neighboring Syria.
It remained uncertain whether Kerry's visit to the camp would go ahead for security and logistical concerns.
Kerry was also due to meet Jordan's King Abdullah II later on Wednesday.
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