Palestinian Authority President Mahmoud Abbas welcomes him in Jericho in the West Bank, where the two are expected to hold a joint press conference.
Chief Palestinian negotiator Saeb Erakat called Medvedev's trip a "historic state visit" adding that "the message to the world is that the Palestinians are ready for statehood and independence."
The Palestinian and Russian presidents will sign three agreements in agriculture, sports and communications. Medvedev will than inaugurate a new Russian art museum in Jericho.
"It's a beautiful addition" to the city.
Erakat sees this visit as an important step towards achieving Palestinian independence, he said.
"This is our message to the world: Look at us. We are ready for a statehood, we are ready for independence, we are ready for freedom."
Russia was one of the first countries to recognize the Palestinian state and the Palestinians have full diplomatic representation in Moscow.
Medvedev cancelled an official visit to Israel this month due to a strike by the Foreign Ministry employees who refused to organize the visit and threatened to disrupt the visit if it took place.
Foreign Ministry workers have been striking since mid-December, demanding higher wages.
Ministry spokesman Yigal Palmor told last week that the strike is harming Israeli interests, just as teachers' strikes and hospital strikes do harm, but he blamed the finance ministry for ignoring the workers' demands.
"They are not taking the strike seriously -- they are treating it as a playground strike," he said.
Israeli President Shimon Peres phoned the Russian president, apologized for the canceled visit, and thanked him for his involvement in the Middle East peace process.
Medvedev accepted to Peres' invitation to meet him at the World Economic Forum in Davos, Israel said.
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