Revava, West Bank (CNN) -- A contentious issue between Israelis and Palestinians that some say could derail Mideast peace talks is set to reach a milestone on Sunday.
Israel's moratorium on settlement construction in the West Bank is scheduled to end at midnight (6 p.m. ET) Sunday. Israelis and Palestinians are in the initial rounds of face-to-face peace talks, and Palestinians have said a restart by the Israelis could be reason enough to end talks.
A massive rally of settlers is expected on Sunday to show support for continued building.
Settlers and members of parliament are expected to "break ground" in the area. Bulldozers are also expected at the scene -- a gesture to show that settlers are ready to begin building again.
But the Palestinian representative for settlement watch in the West Bank said 20 new caravan homes have been built by Saturday -- before the moratorium was set to expire.
Israeli Prime Minister Benjamin Netanyahu on Sunday called on settlers to show restraint as a building moratorium in the West Bank was coming to an end.
"The (prime minister) calls on residents in Judea and Samaria and the political parties to show restraint and responsibility today and in the future, exactly as they showed restraint and responsibility throughout the months of the suspension of the building," a statement from Netanyahu's office said.
According to Peace Now, an Israeli settlement watch group, plans for thousands of houses are ready to go, and construction will start as soon as the freeze is lifted.
Palestinian Authority President Mahmoud Abbas told the U.N. General Assembly on Saturday that settlements were a key issue.
"Israel must choose between peace and the continuation of settlements," he said.
In the past few days, Netanyahu has spoken to U.S. Vice President Joe Biden, U.S. Secretary of State Hillary Clinton and former British Prime Minster Tony Blair about working out a compromise, an Israeli government source said.
The United States has pushed Israel to extend the moratorium.
Speaking on ABC's "This Week," President Barack Obama's top adviser, David Axelrod, avoided discussing any details regarding the lifting of the moratorium.
But he called the ongoing talks between Israel and the Palestinians "an unparalleled opportunity."
"Everyone understands that these talks are absolutely crucial," he said. "We're at an important junction."
On CNN's "Fareed Zakaria GPS," Israeli President Shimon Peres said it's a "fair possibility" that the negotiations will result in a two-state solution.
"Honestly, for me, the end of the conflict is needed because it's not a matter of political wisdom. It's a matter of principles," he said. "We, the Jewish people, were not born to govern other people. It stands against everything that we stand for. For me it's a moral test. We think the better the Palestinians will have it, shall be better for us."
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