At the same time, cease-fire talks among Palestinians were put off for a day for technical reasons, and Israel broke ground on a new Jewish neighborhood in East Jerusalem, a move which U.S. and Palestinian officials called a violation of the internationally-backed "road map" plan for Israeli-Palestinian peace.
The Israeli military launched a large-scale raid on suspected militants in the West Bank city of Ramallah Monday, killing at least three armed Palestinians and arresting dozens of other people, the army said.
Officials from both sides began arriving in Geneva on Monday to sign the unofficial treaty — dubbed the "Geneva Accord" — before a closely guarded guest list expected to include former president Jimmy Carter and other winners of the Nobel peace prize.
"For the first time in more than a hundred years of conflict a detailed and comprehensive solution was agreed upon which settles the most critical issues of this conflict," the negotiators said in a statement.
The treaty proposes borders between Israel and a future Palestinian state close to Israel's borders before the 1967 Mideast war. It also gives the Palestinians almost all the West Bank and Gaza Strip and part of Jerusalem.
The negotiators claim their work is in line with the U.S.-backed "road map" for peace and other plans.
Some 200 Israelis came for the day by charter from Tel Aviv, and an equal number of Palestinians arrived on a flight from Amman, Jordan for Monday's ceremony. Palestinians have no functioning international airport and face strict restrictions traveling through Israel.
They took off even as both Israelis and Palestinians protested the virtual peace deal. The hall where the signing will take place was to feature a large sign declaring "There is a plan," and a live olive tree.
Neither Israeli nor Palestinian leaders have backed the plan, though it is only symbolic. Israeli Prime Minister Ariel Sharon has said the plan is subversive, insisting that only governments may conduct such negotiations. The hard-line government opposes the far-reaching Israeli concessions that are key parts of the Geneva Accord.
Senior Palestinian officials wavered Sunday before agreeing at the last minute to attend the ceremony, heightening Israeli fears about the Palestinians' ability to commit to even a nonbinding peace agreement.
Two Palestinian Cabinet ministers and two influential legislators who helped negotiate the plan refused to go when they were threatened by militants. They changed their minds after they said Palestinian leader Yasser Arafat backed their participation, overriding criticism from Fatah hard-liners. Publicly, Arafat has given the accord only vague support.
Back in Israel, a U.S. envoy continued talks Monday, after meeting the Israeli and Palestinian prime ministers over the weekend, reports CBS News Correspondent Robert Berger.
U.S. envoy William Burns met with Israeli Defense minister Shaul Mofaz Monday, and urged Israel to comply with the peace plan and remove about 100 illegal settlement outposts in the West Bank.
"We continue to focus ... on the moment of opportunity here with regard to the road map," he said.
Mofaz said Israel plans to dismantle about 10 outposts as a first step.
However, Israel is reluctant to remove all the outposts until the Palestinians keep their commitment under the plan, and dismantle terrorist groups.
The talks in Cairo among Palestinian factions will begin Wednesday instead of Tuesday to allow for the "parties and individuals to arrive," senior Palestinian negotiator Saeb Erekat said.
Palestinian Prime Minister Ahmed Qureia, who is expected to attend the final days of the talks, is trying to secure a truce commitment from the Palestinian factions.
Qureia hopes the truce will lead to a mutual cease-fire with Israel and allow the sides to begin serious talks on implementing the U.S.-backed "road map" peace plan.
The militant groups Hamas and Islamic Jihad, which are responsible for most of the suicide bombings in the past three years of fighting, are to participate in the talks in Cairo.
Bulldozers pushed ahead Monday morning with road construction for the East Jerusalem neighborhood of "Nof Zahav" — or Golden View — which will abut Jabel Mukaber, a heavily populated Arab residential area close to the United Nations' local headquarters.
Yehuda Levy, one of the Nof Zahav sponsors, said the new settlement would include 550 housing units, a hotel and schools. He said construction of the houses would begin in the spring and that the private project is going up for commercial, not ideological, reasons.
Palestinians say it violates the roadmap peace plan which calls for a freeze on settlement activity.