Israeli and Turkish negotiators will meet on Sunday in Rome aiming to reach an agreement on normalising relations after the two countries fell out six years ago, sources said.
Previously, the discussions had been expected to take place in Turkey.
If an agreement is reached, it would go before Israel's security cabinet for approval on Wednesday, according to media reports and an Israeli official who requested anonymity.
Analysts say it is very likely that an agreement will be concluded on Sunday.
Once tight relations between Israel and key NATO member Turkey were significantly downgraded after Israeli occupation forces staged a deadly pre-dawn raid on a six-ship flotilla in May 2010 killing nine activists and injuring dozens others on the Turkish Mavi Marmara ship as the flotilla tried to break the blockade on Gaza.
Two of Turkey's key conditions for normalisation -- an apology and compensation -- have largely been met, leaving its third demand, that Israel lift its blockade on the Hamas-run Gaza Strip, as the main obstacle.
According to the Turkish daily Hurriyet, the two sides have reached a compromise whereby Turkey would send aid for Palestinians via the Israeli port of Ashdod rather than directly to Gaza.
A meeting between Israeli Prime Minister Benjamin Netanyahu and US Secretary of State John Kerry is also expected on Sunday in the Italian capital to discuss the state of Israeli-Palestinian peace negotiations.
*The story was edited by Ahram Online.