Bush, who arrived in Tel Aviv on the 60th anniversary of the founding of Israel, met with Israeli Prime Minister Ehud Olmert and President Shimon Peres to reaffirm relations. Bush is to address the Knesset Thursday, The New York Times said.

Bush plans to meet Israeli leaders and former British Prime Minister Tony Blair to push the peace plan brokered in Annapolis, Md., that paves the way to a future Palestinian state.

Most analysts say it is unlikely Bush will make significant progress on the peace plan, though in an interview with CBS Radio Monday, the president said there is a "good chance" to reach a deal.

Israeli officials expressed cautious optimism about the visit by the U.S. president, with Ami Ayalon, a member of parliament, calling it a "last chance" to bring peace to the region.

"If the visit passes and the pragmatists in the region feel that nothing has changed," Ayalon said, "I believe we are headed toward more violence and more terror and more power for Hamas."