Prime Minister Benjamin Netanyahu is leaning toward accepting the United Nations' proposal that it investigate the Gaza-flotilla affair.
This would make Netanyahu the first Israeli prime minister to agree to a UN investigation into an Israel Defense Forces operation.
The U.S. administration is pressuring Israel to accept the proposal by UN Secretary General Ban Ki-Moon, and Netanyahu is expected to make a decision this week.
Initially Israel had hoped the Obama administration would help it quash Ban's initiative, but the U.S. ambassador to the United Nations, Susan Rice, proposed that Israel be pressured.
Senior diplomats familiar with the matter say Rice has described the establishment of a UN committee "critical to U.S. interests at the UN."
According to Ban's proposal, a review panel would examine the investigations that Israel and Turkey are carrying out.
The team would thus begin its work only after the investigations in each country are completed.
Heading the review panel would be former New Zealand prime minister Geoffrey Palmer, while his deputy would be outgoing Colombian President Alvaro Uribe.
As Turkey's representative on the panel, Ankara mentioned the name of a senior diplomat who has served as director general of the Turkish Foreign Ministry.
Israel has not discussed who might represent it on the committee, whose establishment it has not yet agreed to.
A senior political source said Ban told Defense Minister Ehud Barak during their meeting on Friday at UN headquarters that he hopes to have Israel's answer by the weekend.
The source said the question of establishing a UN review panel was a key issue during the meeting.
Barak presented Israel's reservations regarding the committee's mandate and asked for clarifications on a number of issues.
The subject is expected to be discussed this week in the forum of seven senior ministers. It might also be brought before the cabinet.
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