As well as the concessions, Prime Minister Benjamin Netanyahu's security cabinet - a forum of senior ministers - voted to establish a committee to examine legalising outposts built without formal approval in the occupied West Bank. But Trump may face concerns from Israelis over the new $110 billion arms deal he announced during his previous stop in Saudi Arabia as well as questions from Israeli officials about revelations that he disclosed sensitive Israeli intelligence to Russian officials.
While Israeli officials welcomed President Donald Trump's plan to visit the Western Wall, one of the holiest sites in Judaism, they disapproved of comments made by a junior US official regarding the wall's territorial status.
President Donald Trump has arrived in Bethlehem for a meeting with Palestinian President Mahmoud Abbas (mahk-MOOD' ah-BAHS').
According to the White House, the visit affirmed the theme of Trump's first overseas trip, promoting unity and peace among the three Abrahamic faiths.
"But we need two willing parties", he continued.
Asked whether he believed the wall to be a part of Israel, McMaster was noncommittal.
Donald Trump: "They're great parents".
The competing claims sometimes spill over into violence, and the USA has withheld recognition of Israeli control of the area until there is a deal.More news: Warriors try for 12th straight playoff win, sweep
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Saudi Arabia doesn't recognize Israel and the two states don't have diplomatic relations.
Trump was presented with a Book of Psalms with his name printed on it by the rabbi of the Western Wall, Shmuel Rabinowitz.
When Trump met Abbas this month in Washington, he stopped shortly of explicitly recommitting his administration to a two-state solution to the decades-old conflict, a long-standing foundation of USA policy.
Trump will have visited significant centres of Islam, Judaism and Christianity by the end of his trip, a point that his aides say bolsters his argument that the fight against Islamist militancy is a battle between "good and evil".
Israel was the first country to sign a Free Trade Agreement with the US, in 1985. The official briefed on Sunday's meeting said the package includes building permits for Palestinians in Area C that has largely been off limits to Palestinian development until now.
President Donald Trump and Jared Kushner, left, at the Western Wall in Jerusalem on May 22.
The information was reportedly gathered by a spy embedded within the terrorist group that was working on behalf of Israel, although US and Israeli authorities have neither confirmed nor denied the source was linked to Israel.
The committee was set up in support of Palestinian prisoners on hunger strike in Israeli prisons. Israel disagrees, citing historical and political links to the land - which the Palestinians also assert - as well as security interests.