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US President Donald Trump unveiled the long-delayed US-Israeli plan on Tuesday amid repeated rejections by Palestinians.
"Today Israel has taken a giant step towards peace," Trump said as Israeli Prime Minister Benjamin Netanyahu stood by his side.
"My vision presents a win-win solution for both sides," he said, adding that Israeli leaders have said they will endorse the plan, which is referred to as the Middle East peace plan.
Before the proposal was announced, Palestinians called it dead on arrival, saying it was an attempt to "finish off" the Palestinian cause.
Palestinian President Mahmoud Abbas is expected make comments about the plan at 19:00GMT.
Trump's initiative, whose principal author is his son-in-law Jared Kushner, follows a long line of efforts to resolve one of the world's most intractable issues. Israeli-Palestinian peace talks collapsed in 2014.
Palestinians have refused to engage the Trump administration and denounced its first stage - a $50bn economic revival plan announced last June.
As part of the plan announced on Tuesday, major Israeli settlement blocs inside the occupied West Bank would remain under Israeli control, senior administration officials said prior to the proposal's release.
The plan also calls for a four-year freeze in Israel settlement activity, the officials said.
The officials added that the plan calls for the creation of the State of Palestine. It was previously unclear whether the plan would abandon a "two-state solution".
Trump said Jerusalem will remain Israel's "undivided capital". But he also said under the plan, East Jerusalem would serve as the State of Palestine's capital.
Abbas has previously said the United States cannot be an honest broker for peace in the region, accusing it of pro-Israel bias.
Since coming to office, the Trump administration has recognised Jerusalem as the capital of Israel, moving the US embassy from Tel Aviv to Jerusalem, and slashing hundreds of millions of dollars in humanitarian aid to the Palestinians.
The Trump administration in November reversed decades of US policy when Secretary of State Mike Pompeo announced that Washington no longer regarded Israeli settlements on occupied West Bank land as inconsistent with international law.
The plan comes as Trump and Netanyahu face political issues at home.
Trump was impeached in the House of Representatives last month and is on trial in the Senate on abuse of power charges. Netanyahu faces corruption charges and an national election on March 2, his third in less than a year. Both men deny wrongdoing.
Netanyahu's election rival, Benny Gantz, who was also in Washington, DC, this week said he too supported the plan.
"The president's peace plan is a significant and historic milestone indeed," Gantz told reporters on Monday.
More soon...
