Israeli and Palestinian leaders headed on Monday for a summit with US President Barack Obama, with both sides sceptical the "photo-op" encounter will lead to a resumption of stalled peace talks.

The US leader is to hold a three-way meeting with Israeli Prime Minister Benjamin Netanyahu and Palestinian president Mahmud Abbas on Tuesday on the sidelines of the UN General Assembly in New York.

It will mark Netanyahu's first meeting with Abbas since the hawkish premier was sworn into office nearly six months ago.

Officials are keeping expectations low ahead of the meeting, which was called by Washington even though weeks of shuttle diplomacy by its Middle East envoy George Mitchell failed to produce a breakthrough on restarting talks.

"Conditions are not ripe for a formal relaunch of negotiations," Israeli government secretary Zvi Herzog told army radio, calling Tuesday's meeting simply "a step in the right direction."

The comments were an echo of those made by a senior Palestinian Authority official on Saturday after he confirmed that Abbas would attend the talks.

"It will be a formal meeting because we don't want to disappoint the American administration which wants it held," the official said on condition of anonymity. "That does not mean a resumption of peace talks."

Israeli media were more biting, with the mass-selling Yediot Aharonot daily calling it a "joke" and the Maariv newspaper describing it as "no more than a photo-op."

Both Israel and the Palestinians have accused each other of scuppering the efforts made by Mitchell in frantic shuttle diplomacy last week to find a formula under which the two sides could agree to resume talks suspended in late December.

The main sticking point is the issue of Jewish settlements in the occupied West Bank which are home to half a million Israelis but considered illegal by the international community and one of the main hurdles to any peace deal.

Israel has rebuffed US calls for a freeze on construction, offering what it calls a temporary ease on building, and the Palestinians have demanded a complete stop before negotiations resume.

The Israelis are accusing the Palestinians of placing preconditions to resuming negotiations, while the Palestinians say Israel is refusing to abide by commitments made under a 2003 peace plan known as the roadmap.

"It is the Palestinian Authority that is preventing such a meeting and the resumption of talks by placing preconditions on such a resumption, preconditions not demanded of previous Israeli governments," the Israeli foreign ministry said in a statement late on Friday after Mitchell left the region empty-handed.

Parried top Palestinian negotiator Saeb Erakat the next day: "It is Netanyahu who refuses the call by Obama to resume negotiations on the basis of international resolutions and the roadmap, and we hope that the American president will force the parties to apply them."

Each side is hoping to convince Obama of its viewpoint during Tuesday's meeting, which the US president will convene after holding separate talks with the two leaders.

"We hope that this meeting will be an opportunity for President Obama to listen to the different points of view and to understand who is blocking the negotiations," Erakat said.

Israeli deputy foreign minister Danny Ayalon retorted: "The (US) president cannot want peace more than the parties involved. This concerns above all the Palestinians who have adopted maximalist positions."

Fearing Netanyahu will give in to US pressure, a group of settlers set up a protest tent outside his Jerusalem residence on Monday, warning against any such move.

Obama's administration has been working towards a comprehensive peace package that would see Israel strike deals with the Palestinians, Syria and Lebanon, and Arab countries normalise relations with the Jewish state after more than 60 years of conflict.

Israel and the Palestinians resumed negotiations in November 2007 after a nearly seven-year hiatus, but the talks made little visible progress and were suspended in late December after Israel launched its war in the Hamas-run Gaza Strip.