Donald Trump holds joint press conference with Israel's Benjamin Netanyahu

President Donald Trump prepared to host Israeli Prime Minister Benjamin Netanyahu on Wednesday for talks that could shape the contours of future Middle East policy, as Palestinians warned the White House not to abandon their goal of an independent state.

For decades, the idea of creating a Palestine living peacefully alongside Israel has been a bedrock U.S. position, though the last negotiations broke down in 2014.

But in a potential shift, a senior White House official said on Tuesday that peace did not necessarily have to entail Palestinian statehood, and Trump would not try to "dictate" a solution.

As Trump and Netanyahu prepared to meet, a senior Palestinian official disclosed that on Tuesday, CIA director Mike Pompeo held talks with Palestinian President Mahmoud Abbas in Ramallah, the seat of the Palestinian government in the occupied West Bank.

"(It was) the first official meeting with a high-profile member of the American administration since Trump took office," said the official, who spoke on condition of anonymity and declined to disclose details of the discussion.

Netanyahu committed, with conditions, to the two-state goal in a speech in 2009 and has broadly reiterated the aim since. But he has also spoken of a "state minus" option, suggesting he could offer the Palestinians deep-seated autonomy and the trappings of statehood without full sovereignty.

Palestinians reacted with alarm to the possibility that Washington might ditch its support for an independent Palestinian nation.

"If the Trump Administration rejects this policy it would be destroying the chances for peace and undermining American interests, standing and credibility abroad," Hanan Ashrawi, a senior member of the Palestine Liberation Organization, said in response to the U.S. official's remarks.

"Accommodating the most extreme and irresponsible elements in Israel and in the White House is no way to make responsible foreign policy," she said in a statement.

Husam Zomlot, strategic adviser to Abbas, said the Palestinians had not received any official indication of a change in the U.S. stance.

"NO GAPS"

For Netanyahu, the talks with Trump will be an opportunity to reset ties after a frequently combative relationship with Democrat Barack Obama.

The prime minister, under investigation at home over allegations of abuse of office, spent much of Tuesday huddled with advisers in Washington preparing for the talks. Officials said they wanted no gaps to emerge between U.S. and Israeli thinking during the scheduled two-hour Oval Office meeting.

Trump, who has been in office less than four weeks and has already been immersed in problems including the forced resignation of his national security adviser, brings with him an unpredictability that Netanyahu's staff hope will not impinge on the discussions.

During last year's election campaign, Republican candidate Trump was relentlessly pro-Israel in his rhetoric, promising to move the U.S. embassy from Tel Aviv to Jerusalem, backing David Friedman, an ardent supporter of Jewish settlements, as his Israeli envoy and saying that he would not put pressure on Israel to negotiate with the Palestinians.

That tune, which was music to Netanyahu's ears and to the increasingly restive right-wing within his coalition, has since changed, making Wednesday's talks critical for clarity.

Trump appears to have put the embassy move on the backburner, at least for now, after warnings about the potential for regional unrest, including from Jordan's King Abdullah.

And rather than giving Israel free rein on settlements, the White House has said building new ones or expanding existing ones beyond their current borders would not be helpful to peace.

That would appear to leave Israel room to build within existing settlements without drawing U.S. condemnation, in what is the sort of gray area the talks are expected to touch on.

For the Palestinians, and much of the rest of the world, settlements built on occupied land are illegal under international law. Israel disputes that, but faces increasing criticism over the policy from allies, especially after Netanyahu's announcement in the past three weeks of plans to build 6,000 new settler homes in the West Bank and East Jerusalem.

(Additional reporting by Matt Spetalnick and Steve Holland in Washington and Maayan Lubell and Jeffrey Heller in Jerusalem; Editing by Mark Trevelyan)