By Dan Williams

JERUSALEM, Sept 19 (Reuters) - U.S. Secretary of State Condoleezza Rice begins a 24-hour Middle East visit on Wednesday to prod Israelis and Palestinians toward narrowing their differences ahead of a conference on Palestinian statehood.

Israeli-Palestinian disagreements over what to expect from the conference have cast a shadow over the meeting called for by U.S. President George W. Bush after the Islamist Hamas group seized control of the Gaza Strip in June.

While Palestinian President Mahmoud Abbas wants the meeting to grapple with core concerns of a future Palestinian state such as border-setting and the fate of Arab East Jerusalem and refugees, Israeli Prime Minister Ehud Olmert has spoken of reaching a joint declaration of intent -- not a binding accord.

The disagreement has stirred new worries for Abbas, who is locked in a battle with hardline Hamas for Palestinian support.

"We can live without a conference, but we cannot live with a conference that fails," an Abbas aide said on Tuesday, after officials said the Palestinian president was under pressure from his secular Fatah movement not to attend.

U.S. officials said Rice wants to ensure that Abbas and Olmert can deliver enough at the conference to draw in key regional player Saudi Arabia, which has put Washington on notice it is not interested in coming unless substantive issues are addressed.

Israel has its own misgivings about dealing with Abbas, whose mandate has effectively been limited to the occupied West Bank since Hamas -- which is shunned by the West and has described the conference as doomed -- seized the Gaza Strip.

Despite the Abbas-Hamas schism, Palestinians still demand a one state in both territories, captured by Israel in a 1967 war.

BARRIERS

Olmert's office played down his differences with Abbas.

"There are two approaches that don't contradict each other," Olmert's spokeswoman Miri Eisin said. "The expectations are realistic on both sides, and the vision is a common one -- a two-state solution."

But she added: "The idea that the conference is going to bring about a resolution to 60 years of conflict was never in either statesman's eyes."

Israeli officials intend to present Rice with a plan to remove a small number of barriers that restrict Palestinian travel in the occupied West Bank, Western officials said.

One Western diplomat said the plan was expected to call for the removal of about five barriers in the first phase. Israel has scattered hundreds of military checkpoints and unmanned roadblocks in the West Bank, citing a need to keep out suicide bombers. Palestinians call the barriers collective punishment.

"It is a modest start," another Western diplomat briefed on the outlines of the plan said.

Israeli officials said Defence Minister Ehud Barak, who meets Rice on Wednesday afternoon, would likely support removing between one and two checkpoints and a few unmanned barriers.

David Welch, the U.S. State Department's key negotiator between the Israelis and Palestinians, on Tuesday said the run-up to the conference "is an important moment and we think we can make some progress here".

The conference is expected to take place in the Washington area in late November but it is not clear who will participate. (Additional reporting by Adam Entous in Jerusalem)

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