Secretary of State Rex Tillerson has said previously that planning is under way for a new facility in Jerusalem that will take at least three years.
In the meantime, three US officials say Tillerson may designate an existing US consular building in West Jerusalem as the interim embassy.
The officials say Tillerson hasn't made a decision.
The officials weren't authorised to discuss the situation by name and demanded anonymity.
Two of the officials say Vice President Mike Pence is pushing the State Department to accept the proposal quickly so Pence can announce it while in Israel. Pence departs Friday for the Middle East.
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