The Obama administration, on the other hand, sees the creation of a Palestinian state as a key part of the stability of the region.
How the two leaders resolve their differences will have significant impact on what many Middle East experts say is likely to be, one way or another, a momentous year in the region. Obama is under pressure to demonstrate that his approach is yielding results, while Iran is proceeding with work on a nuclear program that is bringing it closer to obtaining a nuclear weapon.
Even more crucial, on June 4 Obama is scheduled to deliver his much-anticipated speech to the Muslim world from Cairo.
As for Monday's meeting, administration officials seem to be playing down prospects for significant breakthroughs. But they and regional analysts acknowledge that when the president addresses the broader Islamic community from an Arab country, he must be able to offer concrete progress on the Palestinian issue.
"What Obama says in his speech cannot depend on what Netanyahu says or doesn't say in this meeting," says Stephen Cohen, a national scholar with the Israel Policy Forum, a group that advocates a comprehensive Middle East peace accord. "Addressing the Palestinian issue will be an essential part of the president addressing the Muslim world from Cairo, and I'm quite sure they [in the White House] know that."
Netanyahu was also prime minister during part of the Clinton presidency, and he returns to power just as a new US administration is pressing to reinvigorate the Middle East peace process.