US President Barack Obama is to host a summit of Israeli and Palestinian leaders, but Washington admits it has no "grand expectations" from the talks.
US President Barack Obama has called on Israeli and Palestinian leaders to act with a "sense of urgency" in restarting stalled peace talks.
In New York, Israeli PM Benjamin Netanyahu and Palestinian leader Mahmoud Abbas will be discussing the possibility of re-starting peace talks.
Mr Obama was speaking in New York where he was hosting tri-lateral talks with Israeli PM Benjamin Netanyahu and Palestinian leader Mahmoud Abbas.
But they have been blaming each other for blocking a US initiative.
Each side has so far blamed the other for blocking the initiative.
Israel has rejected US and Palestinian demands for a total freeze before a new round of talks can take place.
Israel has rejected US and Palestinian demands for a total freeze before a new round of talks can take place.
'Photo opportunity'
The meeting brought Mr Netanyahu and Mr Abbas together for the first time since Mr Netanyahu came to office in March.
President Obama is bringing Mr Netanyahu and Mr Abbas together for the first time since Mr Netanyahu came to office in March.
Mr Obama - who has defined peace between Israel and the Palestinians as a "national interest" of the US - first met each leader separately, before hosting trilateral talks.
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.
But the BBC's Jeremy Bowen in New York says it appears that the US president's hopes for peace in the Middle East remain gridlocked for now.
"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".
Palestinian views on summit
"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.
Separately, the Israeli prime minister said he would boycott the address by Iranian President Mahmoud Ahmadinejad to the UN General Assembly.
A senior Israeli official said Mr Netanyahu "does not want to dignify with his presence Ahmadinejad, who is a holocaust denier that has called for the destruction of Israel".
Mr Ahmadinejad provoked international anger last week when he said the Holocaust was "a lie based on an unprovable and mythical claim".
'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.
Tony Blair, the envoy for the international community's Middle East Quartet - the UN, EU, US and Russia - on the Middle East said he believed there were grounds for optimism, because the US and Arab states saw peace as a priority.
"It's difficult at the moment, but it's difficult precisely because people are serious about it," he said.
Israeli President Shimon Peres said he hoped the meeting would lead to continued negotiations.
But 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, the military said.
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.
A neighbour of the man told the Associated Press he had had no connection with armed groups and was killed "in cold blood".
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