Israel's Foreign Minister says a Palestinian state could start operating within eight weeks.
Mr Shimon Peres says he expects any US peace proposal for the Middle East to include establishment of a Palestinian state and reform of the Palestinian Authority.
He adds he and Palestinian officials have reached an understanding.
Mr Peres says they agree that such a state could start functioning "in the matter of eight weeks without having yet the final borders."
He confirmed the Israel parliament has yet to approve or reject such an agreement.
Mr Peres said: "We don't expect that it should be a very detailed declaration but it will clearly include a vision that was already announced, namely two states for the two people, the Palestinian state and the Israeli state.
"I think the ideas that are being spread in Washington, Saudi Arabia and Egypt are based very much on this idea. We call it a provisional state but provisional are the borders, not the state."
Mr Peres said any peace plan should also envisage an "uncompromising fight against corruption, against terror and against chaotic situations."
He also urged the Palestinians, "to reform their government and work very hard to achieve a cease-fire."
"I believe that in spite of all the difficulties we can pave the way for a better understanding in the short term," Mr Peres said. "What we expect is a more precise American position for the ways to solve the conflict in the Middle East."
PA