Palestinian President Mahmoud Abbas fears he will be pressured to recognize Israel as the homeland of the Jewish people, a step he believes would abrogate the rights of Palestinian refugees and their descendants.
A senior State Department official said Kerry would not impose ideas or seek final answers on this trip. Instead, he is allowing time for debate during the visit, which includes meetings with Netanyahu on Thursday and Abbas Friday.
But the official suggested that the leaders will eventually have to decide whether they are on board and that qualified acceptance watered down by reservations is not sufficient.
Israeli-Palestinian negotiations resumed last summer, and just four months remain until a U.S.-set target date for a final agreement.
Underlying the ongoing impasse is the lack of agreement on ground rules. Kerry hopes that progress will be possible once the two sides agree on the outlines of a deal.
Kerry has kept his ideas for a framework under wraps, but he has said the contours of a deal are known after two decades of intermittent negotiations.
The U.S. says a Palestinian state should be established alongside Israel, with the border between them based, with some modifications, on Israel's 1967 frontier, before it captured the West Bank, Gaza Strip and east Jerusalem. The Palestinians seek all three areas for their state but agree to minor land swaps.
Netanyahu has so far refused to accept the 1967 lines as a reference. Doing so would imply Israeli willingness to partition Jerusalem and its sensitive religious sites, give up most of the West Bank and uproot tens of thousands of close to 600,000 Israeli settlers living on occupied land. Such ideas are anathema to Israel's right-wing, including many in Netanyahu's Likud Party.
Israel withdrew from Gaza in 2005 after a dramatic decision by Israel's most famous hawk, then-Prime Minister Ariel Sharon.
Netanyahu has sent conflicting signals, accelerating settlement plans in recent months but also telling Likud legislators this week that a leader is measured by his ability to make tough decisions. Trying to divine Netanyahu's intentions has become a national obsession.
Ofer Shelah, a legislator in the centrist Yesh Atid party, Netanyahu's largest coalition partner, said Netanyahu is still hedging.
"There aren't any signs that he already made a Sharonian decision and is moving toward it," said Shelah. Still, Netanyahu is aware of the risks of a collapse of the negotiations, including Israel's growing international isolation, Shelah added.
Others said Netanyahu is struggling with the decision.
"If he decides to say yes to the '67 lines, he has to say no to his party," said commentator Akiva Eldar, who writes for the regional news website Al-Monitor. "This is as difficult [for him] as it is for ... an Orthodox Jew to eat pork on Yom Kippur. It goes against everything he believes in."
Those favoring a partition deal say Netanyahu can move forward even without the support of his political allies. Opposition lawmakers have said they would support him.
An opinion poll Wednesday indicated that a majority of Israelis and Palestinians favor a Palestinian state alongside Israel, but that support drops when respondents are given specifics to ponder.
For Abbas, the biggest concern is that he will be asked to make concessions on the fate of refugees by recognizing Israel as the Jewish homeland, his aides said. Hundreds of thousands of Palestinians fled or were expelled in the war over Israel's creation in 1948. These refugees, and their descendants, now number several million. The refugee issue is so charged that Palestinian leaders have largely avoided public debate on the matter, while insisting that Israel recognize at least the principle of a "right of return."
Israel has emphatically ruled out absorbing large numbers of refugees, saying this would dilute the state's Jewish majority.
Abbas aides said they don't know what Kerry will propose on this trip. But during a policy speech last month, Kerry listed "recognition of Israel as the homeland of the Jewish people" as one of the elements of a deal.
Israeli officials say they need such recognition as proof of Palestinian intentions.
"We have to know that once a Palestinian state is to be established, it is going to end the conflict and not just be a platform for continuing conflict," said Regev, the government spokesman.
Palestinians argue that recognizing Israel as a Jewish state would mean dropping the demand for a right of return. The Palestinians have already recognized the state of Israel and believe this is sufficient.
"Israel also wants us to accept its narrative of history and to give up our narrative, culture and history," former Palestinian negotiator Mohammed Ishtayeh told reporters last month.
Analysts said Abbas would find it hard to make such a concession up front, without any actual gains in negotiations. For now, Abbas is talking tough. He informed President Barack Obama in a recent letter that recognition of a Jewish state is one of his red lines.
In a New Year's speech, he warned that "We will not hesitate for a moment to say no, regardless of the pressure, to any proposal that contradicts ... the national interests of our people."