"US special envoy George Mitchell will present two draft letters of guarantee, one for Israel and one to the Palestinian Authority during his next visit to the region," one Arab diplomat told AFP.
"The United States are hoping that the two letters will serve as a basis for the relaunch of Israeli-Palestinian negotiations but we don't know if they will satisfy the Palestinians who want a complete freeze of settlement activity before talks resume," the diplomat said.
The United States is currently in talks with the Palestinians and Egypt -- a key US ally in the region -- over the letters, a Western diplomat said.
Washington is hoping that "the two letters will allow for the relaunch of negotiations," which have been suspended for almost a year, the diplomat said.
Israeli Prime Minister Benjamin Netanyahu, who is expected in Cairo on Tuesday, last month announced a 10-month moratorium on new housing starts in Jewish settlements in the West Bank in a move he said was aimed to helping to kick-start the peace talks suspended during the Gaza war at the turn of the year.
The moratorium does not include public buildings, construction under way and does not apply to occupied and annexed east Jerusalem, which Israelis consider part of their capital, but which the Palestinians want as the capital of their promised state.
The Palestinians have rejected the moratorium, saying it fell far short of their demand for a complete halt of settlement activity in the whole West Bank, including annexed east Jerusalem.
No more excuses
"There's no more time for excuses. It time for action," Netanyahu said while meeting foreign diplomats at the Foreign Ministry. the prime minister expressed his hope that some progress would be made in the Israeli-Palestinian peace process in the coming weeks. The PA, he added, "is running low on excuses."
Netanyahu also said that Israel's most important challenge is Iran's attempt to get nuclear weapons, adding that Foreign Minister Avigdor Lieberman and he have been warning about such a possibility for years.
The prime minister urges the foreign diplomats to cultivate what he called the "global alliance against the impending Iranian danger."
The day when the international community has to make a decision about Iran is approaching, he added, and global interests demand Iran's nuclear ambitions be curbed.