Palestinian President Mahmoud Abbas has been pressing for a document with a timetable for dealing with those issues and moving Palestinians closer to statehood.
"The success of Rice's efforts requires reaching a clear statement that will include the final-status issues, in addition to stopping the settlement projects that aim to isolate Jerusalem and divide the West Bank," said Nabil Abu Rdainah, an Abbas aide.
Olmert told his cabinet that he expected the conference to be followed by "discussions on the possibility of founding a Palestinian state."
But he said that "setting a timetable for this process in advance would create more problems than it would solve."
Rice also plans to meet Abbas in the West Bank during her visit, which is expected to include a trip to Egypt on Tuesday and talks in London with Jordan's King Abdullah on Thursday.
On Sunday, Rice met senior politicians across the Israeli political spectrum, including Industry and Trade Minister Eli Yishai of the ultra-Orthodox Shas party who said he told her "Jerusalem should not be included in the discussions."
"I have the feeling that from conference to conference there are more and more concessions. If at the end of the conference in Annapolis fundamental issues will be agreed upon, it could shake up the government," Yishai said after the meeting.
Olmert named Foreign Minister Tzipi Livni, a political rival who has warned against moving too fast towards an agreement, as chief Israeli negotiator on the joint document.
Rice warned Israel against taking steps that could undermine confidence, alluding to Israel's confirmation last week that it was building a new road near the West Bank settlement of Maaleh Adumim on the outskirts of Jerusalem.
The Israeli army said the road would help connect Palestinian communities. Palestinian officials accused Israel of creating "facts on the ground" before peace talks.
"We have to be very careful, as we are trying to move toward the establishment of a Palestinian state, (about) actions and statements that erode confidence," she said. "This is a very delicate time."
