The secretive academy is not revealing any hints about its selection for the award, which many consider the highest accolade for writers. British betting firm Ladbrokes gives Italian writer Claudio Magris and Syrian poet Adonis the lowest odds for this year's prize.
The Swedish Academy is always the last of the Nobel Prize institutions to set a date for its prize announcement. The winner is always presented by permanent secretary Horace Engdahl at the academy's 18th century offices in Stockholm's Old Town.
Engdahl sparked debate in literary circles this week by saying that the U.S. is too insular and ignorant to challenge Europe as the center of the literary world.
Engdahl's comments in an interview with The Associated Press drew strong reactions in the U.S., where the head of the U.S. National Book Foundation offered to send Engdahl a reading list of American literature.
"Of course there is powerful literature in all big cultures, but you can't get away from the fact that Europe still is the center of the literary world ... not the United States," Engdahl said in the interview Tuesday.
He was speaking in general about American literature - the academy insists that nationality doesn't matter when it makes its pick.
The last U.S. writer to win the award was Toni Morrison in 1993. Americans Philip Roth and Joyce Carol Oates have figured in Nobel speculation for several years now, but have not been tapped.
Last year's literature award went to British writer Doris Lessing.
The Nobel Prize announcements start Monday with the award in medicine. The winners of the prizes in physics, chemistry and peace will also be presented next week, while the economics award will be announced on Oct. 13.
Each Nobel Prize includes a 10 million kronor ($1.3 million) purse, a gold medal and a diploma. The awards are handed out Dec. 10, the anniversary of prize founder Alfred Nobel's death in 1896.