Jordan's King Abdullah said peace would not be attained in the Middle East without the creation of a Palestinian state under a two-state solution that would be the basis of a comprehensive Arab-Israeli peace deal.

In a speech at the start of an Arab summit held beside the Dead Sea, King Abdullah said the kingdom's western neighbour Israel was wrecking the chances of peace by accelerating settlement building in occupied Palestinian territory.

"Israel is continuing to expand settlements and wreck chances of peace ... There is no peace or stability in the region without a just and comprehensive solution to the Palestinian cause through a two-state solution," the king said.

Divided Arab leaders who are attending the one day summit on Wednesday will be seeking common ground to reaffirm their commitment to a Palestinian state, a longstanding goal that U.S. President Donald Trump last month put into doubt.

At a White House news conference with Israeli Prime Minister Benjamin Netanyahu last month, Trump indicated he was open to a one-state solution to the conflict.

The Palestinians and Arabs want Arab East Jerusalem - which Israel captured in a 1967 war and later annexed in a move not recognised internationally - as the capital of a future state encompassing the Israeli-occupied West Bank and the Gaza Strip.

King Abdullah, whose dynasty has custodianship over Muslim holy sites in Jerusalem, said any "unilateral" Israeli move to change the "status quo" in the Dome of the Rock and the Aqsa mosque would have "catastrophic" consequences on the future of the region, inflaming Muslim sentiment.