A White House envoy planned to begin a new Middle East peace mission on Thursday that could determine whether Israel and the United States sink deeper into discord over Jewish settlement policy.

George Mitchell's visit to Jerusalem and the West Bank will be his first since Israeli Prime Minister Benjamin Netanyahu returned a month ago from low-profile talks with U.S. President Barack Obama that underscored a rift between the two leaders.

Netanyahu still has not responded publicly to what political sources have said was a list of 11 "confidence-building" steps Obama wants him to take to coax the Palestinians back into negotiations suspended since December 2008.

But Netanyahu has rebuffed U.S. and Palestinian calls to halt the construction of homes for Jews on occupied land in and near Jerusalem, referring to those areas as Jewish neighbourhoods no different than those in Tel Aviv.

Mitchell was due to arrive in Israel later on Thursday, Palestinian officials and diplomatic sources said, in another attempt to revive the peace talks.

The Palestinians say they will not attend negotiations with Israel -- indirect, U.S.-mediated talks -- without a settlement freeze in the West Bank and East Jerusalem, territory the Jewish state captured in the 1967 Middle East war.

The future of an already strained relationship between Obama and Netanyahu could hinge on the outcome of Mitchell's mission. He was last in the area a month ago, just before Netanyahu's White House talks.