Talks are underway in a New York hotel between members of the so-called Quartet, the European Union, Russia, the United Nations and the United States, searching for a way to broker peace in the Middle East.
Secretary of State Colin Powell is chairing the high-level meeting looking for a common approach to end the Israeli-Palestinian conflict.
The Bush administration has severely criticized Palestinian leader Yasser Arafat and linked his departure to U.S. support for a Palestinian state. But the U.S., Europeans and Arabs say the Palestinian people say it is up to the Palestinians to choose their own leadership.
Diplomats hope the meeting will result in a common plan until Palestinians hold elections early next year. In a broadcast interview on the eve of the meeting, Mr. Powell indicated the United States might be willing to allow Mr. Arafat to stay in office in a symbolic position above a prime minister who would have executive power.
The United States is also calling for substantial reform within the Palestine Authority. The Palestinians say the withdrawal of Israeli forces from Palestinian towns is a precondition to reform. The Israels say they will not withdraw until there is an end to suicide bombings.
Senior officials from Egypt, Jordan and Saudi Arabia are scheduled to join the Quartet group late in the day for a working dinner at the residence of U.N. Secretary General Kofi Annan.
An independent group pressuring for a Middle East peace settlement, the International Crisis Group, published a series of proposals for the Quartet's consideration just before the New York meeting.
The group urges international and Arab leaders to push Israel and the Palestinians towards a final peace settlement that would include a multinational force led by the United States. The plan also calls for a divided Jerusalem, long a sticking point in negotiations between Israel and the Arab world.