Mr Shaath, returning from Switzerland where he attended inconclusive talks between the two men, told reporters he would meet Israeli officials today to start preparations for the meeting.
Mr Arafat and Mr Peres would meet under the auspices of the Egyptian President, Hosni Mubarak, and the Foreign Minister, Amr Moussa, who had played an important role in backing the peace process, Mr Shaath said.
'If we reach solution in the disputes at the Sunday meeting then we will have passed the phase of differences and arrived at stage of signature,' Mr Shaath said.
He said Mr Arafat and Mr Peres had made progress at their weekend meetings in Switzerland. 'I believe we have achieved progress regarding problems which have been stalled for a long time in Gaza and Jericho,' he said.
'We cannot speak about an agreement. We can speak about a step forward towards an agreement,' the Israeli deputy foreign minister, Yossi Beilin, said in Jerusalem. 'I hope that in the coming days it will be possible to create such a situation in which it will be easier to conclude possibly the agreement about the main three obstacles in Cairo in a week or two.'
He cited as obstacles the control of border crossings over the Jordan River to Jericho, the size of the Jericho area to be administered by Palestinians and security for Jewish settlers in the Gaza Strip. He said he was still hopeful the troop withdrawal, due to begin on 13 December, would still be completed by a 13 April deadline.