In New York, Israeli PM Benjamin Netanyahu and Palestinian leader Mahmoud Abbas will be discussing the possibility of re-starting peace talks.

But they have been blaming each other for blocking a US initiative.

Israel has rejected US and Palestinian demands for a total freeze before a new round of talks can take place.

'Photo opportunity'

President Obama is bringing Mr Netanyahu and Mr Abbas together for the first time since Mr Netanyahu came to office in March.

In New York, Mr Obama - who has defined peace between Israel and the Palestinians as a "national interest" of the US - will first meet each leader separately, before hosting trilateral talks.

"We're looking to continue to build on progress," said White House spokesman Robert Gibbs.

But he added that "we have no grand expectations out of just one meeting except to continue... the hard work, day-to-day diplomacy that has to be done to seek a lasting peace".

Israeli and Palestinian participants have also said they do not expect many concrete developments to emerge from the meeting.

Israeli government secretary Zvi Herzog said the meeting was "a step in the right direction", but that "conditions are not ripe for a formal re-launch of negotiations".

Last week, a senior Palestinian official told the AFP news agency the meeting was taking place "because we don't want to disappoint the American administration which wants it held".

"That does not mean a resumption of peace talks," said the official.

The negotiating process was suspended in December.

President Obama wanted to launch new talks at the UN General Assembly in New York, but the failure so far to do this is a serious and potentially humiliating setback for him, the BBC's Middle East editor Jeremy Bowen says.

He says that Mr Obama needs to find a way to turn the New York meetings into more than just photo opportunities, as he can not afford to let his ambitious plans for the Middle East fall apart so soon.

'Natural growth'

Disagreements over the settlements issue have blocked all attempts to restart the peace talks so far.

US and Palestinian negotiators have said Israel must fully halt work on the construction of settlements in the West Bank before a new round of peace talks can take place, something Israel has refused to do.

Israeli views on Middle East summit

Mr Netanyahu had previously offered a temporary freeze for several months, but not in East Jerusalem or in cases where homes have already been approved.

He argues that the "natural growth" of settler families must be accommodated.

Before leaving for New York, the Israeli premier said he would not change his position.

His media adviser, Nir Hefetz, told Israel's Army Radio that some may view freezing settlement activity as a positive move but Mr Netanyahu was "not one of those people".

Hamas, Mr Abbas's rivals who control Gaza, condemned the talks as "cover for Israeli aggression", while Israeli settlers opposed to a settlement freeze set up a protest tent in Jerusalem.

Also on Tuesday, an Israeli-Arab man was shot dead in the West Bank after he tried to run over Israeli soldiers, the military said.

The man drove his car at soldiers at a checkpoint near Bethlehem, where he did not stop as requested. He escaped, but was tracked down to a nearby garage where, the Israeli military said, he again tried to run over the soldiers.

It said soldiers fired towards the man and killed him after he failed to respond to warning shots.