Jerusalem  - US President George W Bush was set Wednesday to arrive in Jerusalem for a two-day visit to mark Israel's 60th anniversary, during which he will meet with Israeli leaders, address the Knesset and speak at an international conference.

The president is slated to meet twice with Prime Minister Ehud Olmert for discussions expected to focus on Israeli-Palestinian negotiations and other regional issues, notably Iran's nuclear programme.

Bush will also hold talks with Foreign Minister Tzipi Livni and Defence Minister Ehud Barak and on Wednesday night is scheduled to give a keynote address at the "Facing Tomorrow" conference being hosted by Israeli President Shimon Peres in Jerusalem.

In interviews with the Israeli media on the eve of his visit, Bush said he was coming to "encourage," rather than demand, progress in the Israeli-Palestinian talks.

He is expected to reiterate his belief that the sides can reach a deal by the end of the year, a point he emphasized during his last visit to the region, in January.

Olmert and Palestinian President Mahmoud Abbas pledged at the November Annapolis summit to try and reach an agreement by the end of this year.

Officials from both sides, led by Livni and former Palestinian premier Ahmed Qureia, have been holding talks on the so-called core issues since the turn of the year.

Although the negotiations are being held under a virtual media blackout, Olmert said Tuesday night that "real progress" has been made in the talks and "understandings" have been reached on important matters, although not on all issues.

Bush is slated to leave Israel Friday morning for Saudi Arabia. (dpa)