President George W. Bush has said he is "very optimistic" a Palestinian state could be set up alongside Israel and that next month's Middle East conference could lead towards peace in the region.
The US-sponsored conference is due to take place in Washington in November, although there are doubts over how far it will go towards ending decades of conflict and uncertainty over which Arab states will attend.
US President George W. Bush
"I am very optimistic that we can achieve a two-state solution," Mr Bush said in comments on Al Arabiya television.
"We will host the international peace conference, and it will be attended by the interested parties and a delegation from the Arab League and it is an opportunity for serious . . . discussions over the road forward to lead to a two-state solution, and efforts will be made to reach this objective," he said.
"I want to affirm that the two-state solution is part of a comprehensive peace in the Middle East and that our strategy is for all parties to attend at the table for the sake of a comprehensive peace. We want to push this issue."
Israeli and Palestinian leaders agreed on Wednesday that formal negotiations on Palestinian statehood would begin after the peace conference.
But Israeli Prime Minister Ehud Olmert has baulked at Palestinian President Mahmoud Abbas's call for setting a specific time frame for the resolution of key issues, including borders and the fate of Jerusalem and the Palestinian refugees.
Mr Abbas said yesterday that formal negotiations for statehood could be completed six months after the conference.
"There is a lot of dialogue between the two men, and I believe the Palestinians and the Israelis have realised that there is a vision that is worth working to achieve," Mr Bush said.
Aside from the Israel and the Palestinians, the United States would like key Arab states to attend the conference, but it is unclear how many will.
Syrian President Bashar al-Assad has said Damascus would not join unless the agenda also includes the Golan Heights, captured by Israel from Syria in the 1967 war at the same time as the occupation of the West Bank and Gaza.
Saudi Arabia, driving force behind an Arab peace proposal relaunched earlier this year, has also indicated it would not attend unless the conference addresses core issues.
The peace conference is part of a US-led effort to bolster Mr Abbas and his West Bank-based government and to isolate Hamas, which seized control of the Gaza Strip in June.