Francis landed in Bethlehem, the cradle of Christianity, in a symbolic nod to Palestinian aspirations for their own state. He called the stalemate in peace talks "unacceptable" and stopped briefly to pray at the Israeli separation barrier surrounding this biblical West Bank town.
At the end of an open air Mass in Bethlehem's Manger Square, the pope invited Palestinian President Mahmoud Abbas and Israeli President Shimon Peres to pray with him for peace.
"I offer my home in the Vatican as a place for this encounter of prayer," he said.
The offices of the Israeli and Palestinian presidents quickly confirmed that they had accepted the invitation.
"We welcome Pope Francis' invitation to the Vatican. President Peres has supported and will continue to support all avenues to bring about peace," Peres' office said in a statement.
Abbas' spokesman, Nabil Abu Rdeneh, said the summit would take place sometime in June.
Peres, a 90-year-old Nobel Peace laureate, is set to step down over the summer, and the meeting would take place shortly before he leaves office.
Peres has been a fervent support of Mideast peace efforts, and the independent-minded Israeli president, whose job is largely ceremonial, risks upsetting Prime Minister Benjamin Netanyahu with the move.
Netanyahu has expressed anger with politicians that have reached out to Abbas at a time when the Palestinian leader is reconciling with the Islamic militant group Hamas. Israel considers Hamas a terrorist group.