JERUSALEM, July 26 (Reuters) - Prime Minister Benjamin Netanyahu's approval rating has plunged as protests over the high cost of living multiply in Israel, a poll published on Tuesday found.

Thirty-two percent of Israelis are satisfied with the Israeli leader's performance while 54 percent are not, according to the liberal Haaretz newspaper, which said the figures reversed survey findings from May.

Then, after Netanyahu received standing ovations at the U.S. Congress as he outlined tough terms for Middle East peace, 51 percent of Israelis supported him and 31 percent of respondents said they opposed his policies, the newspaper said.

The intervening period has seen tent-squatter encampments and sometimes rowdy sit-down demonstrations in Israeli city centers to demand lower housing prices, as well as an intensifying doctors' strike for better wages and conditions.

Between 85 and 87 percent of those polled for Tuesday's survey backed the protesters, and 55 percent said they believed demonstrators would bring about a lowering of property prices.

Netanyahu, a free-market champion whose Likud party leads a broad rightist coalition government, said he would unveil measures on Tuesday to address the crisis.

He had been due on Wednesday to visit Poland and lobby against the Palestinians' bid to sidestep deadlocked peace talks by winning U.N. endorsement for their claim to statehood in all the Israeli-occupied West Bank, East Jerusalem and the Gaza Strip.

But in a reflection of shifting priorities, Netanyahu on Monday called off the Warsaw trip, with aides saying he would instead advance legislation on housing reform.

According to Tuesday's poll in Haaretz, which had 493 respondents and a 4.5 percent margin of error, the Likud would take 27 of parliament's 120 seats were an election held today -- a drop from the 31 seats projected in a March survey.

A similar ballot showing was found for the centrist Kadima party which leads the Israeli opposition, though the once-dominant and now beleaguered left-wing Labour party was seen doubling its parliamentary presence from 6 to 12 seats.

Likud now holds 27 seats out of the ruling coalition's 66. The next election is due in 2013. (Writing by Dan Williams; Editing by Alistair Lyon)