Egyptian President Hosni Mubarak and his American counterpart, Barack Obama, are expected during their White House meeting Tuesday to discuss "an initiative of leaders" for resolving the Arab-Israeli conflict in the Middle East, in which the Palestinians will waive the right of return in exchange for compensation, the London-based Arabic-language al-Quds al-Arabi newspaper reported Tuesday.

According to the report, the same initiative includes amending the 1967 borders in a way which has not been detailed, as well as the establishment of a demilitarized Palestinian state, with Jerusalem being the joint capital of both states.

The report said that the officials supervising the initiative were former US President Jimmy Carter, former Foreign Minister James Baker and former National Security Advisor Brent Scowcroft, who served during the Ford and Bush Sr. administrations.

Mubarak arrived in Washington on Monday and met with US Secretary of State Hillary Clinton and National Security Advisor James Jones. He also held a meeting with leaders of the Jewish lobby in the United States.

According to the newspaper, commentators estimated that Mubarak's meeting with the Jewish lobby is a manifestation of the warming relations between Egypt and the Netanyahu government, which have been expressed in a series of issues in recent months, including allowing Israeli submarines to cross the Suez Canal and Prime Minister Benjamin Netanyahu and President Shimon Peres' visits to Egypt.