World leaders paid tribute to Yassir Arafat today as the man who embodied the Palestinian struggle for statehood - and expressed hope that his death could help make that dream a reality.

After news that the 75-year-old former guerrilla had died in a military hospital in Paris, Tony Blair sent his condolences to Mr Arafat's family and the Palestinian people and said he had "come to symbolise the Palestinian national movement".

"He led his people to an historic acceptance of the need for a two-state solution," the Prime Minister added. "That goal of a viable Palestinian state alongside a secure Israel is one that we must continue to work tirelessly to achieve. Peace in the Middle East must be the international community's highest priority."

A statement from President George Bush was noticeably less warm, reflecting the fact that many Americans consider Mr Arafat a terrorist, especially after his rejection of a deal in 2000 that would have given Palestinians statehood over most of the land they seek.

"The death of Yassir Arafat is a significant moment in Palestinian history. We express our condolences to the Palestinian people," Mr Bush said, without making any comment on Mr Arafat's personal contribution.

"For the Palestinian people, we hope that the future will bring peace and the fulfillment of their aspirations for an independent, democratic Palestine that is at peace with its neighbours.

"During the period of transition that is ahead, we urge all in the region and throughout the world to join in helping make progress toward these goals and toward the ultimate goal of peace."

President Jacques Chirac of France, whose country hosted the Palestinian leader in his dying days, said: "With him disappears the man of courage and conviction who, for 40 years, has been the incarnation of the Palestinians’ struggle for recognition of their national rights.

"May the loss that they have just suffered unite the Palestinians."

In New York, the UN flag at United Nations headquarters flew at half-mast after Kofi Annan, the UN Secretary-General, decided that Mr Arafat should be honoured in death as the head of state that he could never become in life.

"Now that he has gone, both Israelis and Palestinians, and the friends of both peoples throughout the world, must make even greater efforts to bring about the peaceful realization of the Palestinian right of self-determination," Mr Annan said.

Nelson Mandela, a fellow Nobel peace laureate, said: "Yassir Arafat was one of the outstanding freedom fighters of this generation, one who gave his entire life to the cause of the Palestinian people... It is with great sadness that one notes that his and his people’s dream of a Palestinian state had not yet been realized."

Both Javier Solana, the European Union’s foreign policy chief, and Jack Straw, the Foreign Secretary, said the "best tribute" that could be paid to Arafat would be review and move forward according to the "road map", which envisions the creation of a Palestinian state co-existing with Israel.

Mr Straw, who will fly to Cairo tonight for Mr Arafat's funeral tomorrow, said: "President Arafat was such a towering figure in the Middle East that it is hard to imagine the occupied territories, Palestinian politics, Middle East politics and much of world affairs without him.

"The legacy that he leaves is a commitment by the whole of the international community to a viable and separate state of Palestine working alongside, living alongside a safe and secure state of Israel.

In Europe, too, some political leaders and officials leavened their tributes with a measure of skepticism. Terje Roed-Larsen, the UN’s longtime Middle East envoy and a key mediator in past peace talks, said Mr Arafat’s last years were marred by mistakes.

"One of the reasons his credibility as a leader was undermined on the Palestinian side was an increasing agreement among the leadership and the Palestinian people that Arafat had led them in the wrong direction over the past four years," Mr Roed-Larsen said,

Joschka Fischer, the German Foreign Minister, said: "Yassir Arafat’s life stands for the varied and tragic history of the Palestinian people and the Middle East as a whole.

"In it were reflected many people’s hopes for peace, but time and again also their disappointments and setbacks."

Dermot Ahern, the Irish Foreign Minister, said it was "tragic" that Mr Arafat did not live to see an independent Palestinian state, but paid tribute to the Palestinian leadership for safeguarding the rule of law over recent weeks.

In Russia, President Vladimir Putin said that Mr Arafat had "dedicated his life to the Palestinian people’s just cause, the fight for their inalienable right to crate an independent state, which would coexist with Israel within recognized and secure borders".

But, politically, the most important reaction came from Ariel Sharon, the Israeli Prime Minister - who did not even mention Mr Arafat by name.

"The recent events could be a historic turning point for the Middle East," Mr Sharon told reporters. "Israel is a country that seeks peace and will continue its efforts to reach a peace deal with the Palestinians without delay."

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