Any peace deal with the Palestinians must be based on Israel's ability to defend itself if the agreement breaks down, Prime Minister Benjamin Netanyahu said just hours before a visit by Washington's top diplomat.

His remarks were made shortly after two cabinet ministers said Netanyahu was prepared to pull out of parts of the West Bank -- if Israel's security demands are met.

Kerry is due back in Jerusalem on Thursday evening on his fifth trip in as many months as he seeks to coax Israel and the Palestinians back to direct negotiations which collapsed nearly three years ago.

Ahead of his visit, Netanyahu's rhetoric has taken on a different tone and focused more on the substance of any future talks than on the obstacles to actually starting them.

"Peace rests on security. It is not based on good will or legitimacy as some think. It is based, first and foremost, on our ability to defend ourselves," Netanyahu said at a ceremony marking the 109th anniversary of the death of Theodor Herzl, the founding father of Zionism.

"Without security, without the army that Herzl called to establish, we will not be able to defend peace, we will not be able to defend ourselves if the peace unravels," he said.

"A basic condition for the existence of peace, for the achievement of it and for preserving it, is security."

Kerry, who arrived in Jordan on Wednesday, was to have dinner with Netanyahu then meet with Palestinian president Mahmud Abbas a day later in Amman.

Ahead of Kerry's visit, Israeli minister Yaakov Peri said Netanyahu was aware of the concessions he would have to face in any peace talks.

"Netanyahu knows there will be a painful evacuation of a number of settlements that are not in the settlement blocs, and that there will be a land swap," the science and technology minister told army radio.

"There is no doubt that Benjamin Netanyahu and a not-insignificant number of Likud ministers understand, or have reached the conclusion that it is in Israel's strategic interest... to return to the negotiating table," said Peri, a member of the centrist Yesh Atid party.

Despite a growing wave of vocal opposition to a two-state solution within Netanyahu's Likud party and among other senior members of the coalition, there was a "new wind" blowing, Peri said.

"Netanyahu is much more ready than in the past, whether it's for ideological or practical reasons, for an immediate return to the negotiating table," he said.

Haaretz newspaper also ran a story quoting a "senior Likud cabinet member" who said the premier would be ready to give up almost all of the West Bank if Israel's security needs were met.

"Netanyahu understands that for a peace agreement, it will be necessary to withdraw from more than 90 percent of the West Bank and evacuate more than a few settlements," he told the paper.

Another source concurred, saying: "His two key principles are maintaining the settlement blocs as part of Israel and a military presence in the Jordan Valley, without Israeli sovereignty there."

President Shimon Peres, who also attended the Herzl anniversary ceremony, said Israel must not miss the chance to renew talks with the Palestinians on a two-state solution.

"There is a chance to renew the peace process, and it is not to be missed. We welcome the arrival of Secretary of State Kerry, to Israel," he said.

"This is an effort to revive the process and we will all help it to succeed."

And outgoing Bank of Israel governor Stanley Fischer also weighed in on the debate in a rare comment on the diplomatic process.

"I think we could have made more effort to reach an agreement with the Palestinians," he told army radio. "There are partners but we must help them to become stronger and establish the state that they want.

"It is almost clear to everyone that settlement blocs will remain (in Israel) and that there will be compensation given from other places," he said, referring to the land swap principle.

Deputy Knesset Speaker Hilik Bar from the opposition Labour party, urged the Palestinians to seize the opportunity, saying: "There is a majority in the Knesset (parliament) for an agreement, an opportunity that might not present itself again.

"This is a critical juncture in the leadership of both Netanyahu and Abbas," he said during a panel discussion with chief Palestinian negotiator Saeb Erakat, his remarks communicated by a spokesman.