The war in Syria and concerns over Iran's nuclear ambitions will loom large in talks, say correspondents.
But US officials are trying to lower expectations that Mr Obama will seek to make significant headway on restarting the Israel-Palestinian peace process.
Settlement supporters are a big force in Israel's new coalition government.
Israelis are more preoccupied with instability in the wider Middle East region than with breathing new life into the peace process, which broke down in 2010 amid a dispute over continued Israeli settlement construction.
Mr Obama is due to meet Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas during his three-day visit.
US Secretary of State John Kerry is already in the country preparing for the president's arrival.
At home Mr Obama has been criticized for not having visited Israel in his first term as president, with some saying it shows he is not close enough to the country.
That is despite his administration's repeated assertion that the two countries share an "unbreakable alliance".
Thousands of Israeli and Palestinian security officers have been assembled in Jerusalem and the Palestinians' de facto capital in the West Bank, Ramallah, ahead of his trip.
The state of the economy and social issues dominated Israel's last election, and the president has said he is not going to the region bearing any grand peace plan.
But with warnings that time is running out for a two-state solution, some still think he will try to lay the ground for some greater effort to restart talks, our correspondent says.
The president's relationship with Mr Netanyahu has been notoriously frosty and one recent opinion poll suggested a mere 10% of the Israeli public had a favourable opinion of the US president.
The main event of this trip is a speech to the Israeli people - his main task is to build bridges and improve his image, which could give him more leverage over the new Israeli government, our correspondent adds.
Source: BBC News
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