The American peace envoy to the Middle East George Mitchell is in Israel to try to finalise terms between Israel and the Palestinians which could lead to the resumption of peace negotiations.
The BBC reports that the central issue is that of Jewish settlement building.
Last week Israel authorised the building of hundreds of new homes in the occupied West Bank.
President Obama had previously said he wanted all settlement activity to stop.
The Palestinian leadership has said it won't resume peace talks with Israel until that happens.
Israel has indicated it is willing to consider a temporary halt, maybe of around six months, to granting permission for further building in the West Bank.
The US envoy George Mitchell's job will be to see if he can square these competing positions.
It's thought that President Obama is keen for the Israeli and Palestinian leaders to have an initial meeting at the fringes of the United Nations General Assembly in two weeks time.