Prime Minister Benjamin Netanyahu is reportedly mulling transferring responsibility for small areas of West Bank land to the Palestinian Authority as part of a package of major goodwill gestures drawn up by the defense establishment ahead of US President Barack Obama’s upcoming visit to the region.

According to a report in Maariv on Tuesday, the gestures will include the transfer of authority over two access roads — one to the new Palestinian city Rawabi, and the other to the West Bank city of Tulkarem — to full Palestinian control, the approval of building plans for 10 Palestinian villages currently deemed illegal and under threat of being demolished, the release of many of the 123 Fatah prisoners arrested by Israel before the Oslo peace talks, and the transfer of small arms ammunition to the Palestinian security forces.

The report states that the gestures were discussed in the past in talks with Quartet envoy Tony Blair, but Netanyahu rejected them. The defense establishment reportedly drew up the plans while explaining to Netanyahu that the moves would not be a major political liability for the prime minister, but could create a positive global public relations effect.

Netanyahu made brief reference to Israeli concessions in his Monday address to the AIPAC Policy Conference, but focused more on Israel’s imperative to ensure its security.

“Israel is prepared for a meaningful compromise, but as Israel’s prime minister I will never compromise on our security,” Netanyahu told the  Washington gathering by satellite feed from Jerusalem, noting that Israel had withdrawn from south Lebanon and Gaza, “and we got terror. That can’t happen a third time.”

“Israel seeks a peace with our Palestinian neighbors, a peace that will end our conflict once and for all,” he insisted, “but that peace must be grounded in reality and in security…. In the Middle East, a peace you cannot defend will not hold for five minutes.”

Netanyahu’s caution was in keeping with US Vice President Joe Biden’s decidedly pessimistic tone on the prospects of Israeli-Palestinian peace talks.

“It’s going to require hard steps on all sides, but we all have a profound interest in peace,” Biden told the conference. “We’ve got to get caught trying,” he quipped, quoting former US president Bill Clinton.

“So we remain deeply engaged. As President Obama has said, while there are those who question whether this goal will ever be reached, we have no apologies for continuing to pursue this goal.”

On Sunday, the World Tribune reported that Obama expects to see a timetable for a unilateral Israeli withdrawal from the West Bank. The report, citing Israeli sources, indicated that the president had made clear to Netanyahu that his March 20 visit to Israel, his first since becoming president, “is not about photo-ops, but the business of Iran and a Palestinian state.”

The Times of Israel could not independently confirm the report, which contradicted official American comments ahead of the trip, which has been described as a solidarity and consultative mission.

“The implication is that if Israel won’t give him something he can work with, then he’ll act on his own,” the website quoted one source as saying. According to the report, an Israeli pullout plan could form part of an imminent US push to form a Palestinian state in the West Bank in 2014.

Last week, it was rumored that Obama may cancel his scheduled trip if Netanyahu is unable to form a governing coalition by March 16. So far, the prime minister has only been able to sign up Tzipi Livni’s Hatnua party, with its six Knesset seats, for the next government, but most political sources believe he will beat the March 16 deadline.

The White House announced Monday that there were no changes to Obama’s schedule and that the President was looking forward to his visit to Israel.

Outgoing Defense Minister Ehud Barak, speaking at the AIPAC conference in Washington on Sunday night, said that, in lieu of a final-status peace deal with the Palestinians, Israel “should consider unilateral steps” in order to prevent the “dangerous” eventuality of a bi-national state.

Haviv Rettig and Greg Tepper contributed to this report