JERUSALEM - Prime Minister Benjamin Netanyahu's senior coalition partner says that reaching a final peace agreement with the Palestinians is unrealistic at the current time and that the sides should instead pursue an interim arrangement.

Finance Minister Yair Lapid's assessment, delivered in a published interview Sunday just days before the arrival of U.S. Secretary of State John Kerry, throws a contentious idea into the mix as the United States searches for ways to restart peace talks.

It remains unclear whether the idea of a temporary arrangement will be raised during Kerry's visit later this week. In March, American officials confirmed that an interim arrangement, while not their preference, was one of the ideas being explored.

With the gaps between Israel and the Palestinians on many key issues seemingly unbridgeable, pursuing a Palestinian state with temporary borders has emerged as an option in recent months, particularly among Israelis searching for a way out of the status quo. The Palestinians have repeatedly rejected this option, fearing that an interim deal that falls short of their hopes will become permanent.

To allay Palestinian concerns, Lapid told the Yediot Ahronot daily that President Obama should set a three-year timeline for determining the final borders of a Palestinian state. As a gesture to the Israelis, he also called on Obama to endorse the position laid out by President George W. Bush in 2004, allowing Israel to keep some of the Jewish settlements it has built on occupied lands.

The issue of Jewish settlements has been at the heart of the current 41/2-year impasse in peace talks. The Palestinians have refused to negotiate, saying that continued Israeli construction in the West Bank and east Jerusalem is a sign of bad faith. The Palestinians claim for their future state both areas and the Gaza Strip, all captured by Israel in the 1967 Mideast war.

Most Israelis, including Netanyahu, think that the continued control over millions of Palestinians would spell demographic suicide for Israel and that creation of an independent Palestinian state is essential to preserving Israel's identity as a democracy with a Jewish majority.