President Bush made a bold prediction yesterday that Israel and the Palestinians could sign a peace treaty within the year to establish a Palestinian state and end 40 years of Israeli occupation.

After an historic visit to Ramallah in the West Bank Mr Bush said that he understood the frustrations felt by Palestinians caught at Israeli military checkpoints across the West Bank.

The future Palestinian state would have to be contiguous territory, he insisted, and not a “Swiss cheese” of isolated cantons.

“There should be an end to the occupation that started in 1967,” he said, spelling out blunt terms to his Israeli hosts. White House officials said that the President planned to return to the region this year to push for the deal.

Mr Bush was quick to emphasise that he also understood Israeli security concerns. He said that Mahmoud Abbas, the Palestinian President, and Ehud Olmert, the Israeli Prime Minister, had to make tough choices and painful political concessions if the process were to move forward.

“And I’m convinced they will,” he said in a press conference with President Abbas. They stood in the Ramallah compound where Israeli troops besieged the Palestinian leader’s predecessor, Yassir Arafat, for three years before his death in 2004.

“And I believe it’s possible – not only possible, I believe it’s going to happen – that there will be a signed peace treaty by the time I leave office. That’s what I believe,” he added.

The tough choices that Mr Bush has outlined involve Israel freezing the expansion of Jewish settlements, where an estimated 250,000 people live, and removing more than 100 illegal settlement outposts. For the Palestinians dismantling militant factions is the key task. The US leader urged Israel to help the Palestinians to modernise their security forces.

Mr Bush went by road to Ramallah from Jerusalem after thick fog prevented his scheduled helicopter trip, allowing his convoy to pass through Israeli checkpoints and see sections of the huge security barrier erected along the boundary with the West Bank.

“I can see the frustrations. But I also understand that people in Israel want to know whether there’s going to be protection from the violent few who murder,” he said, adding that the checkpoints “reflect the reality. What we are trying to do is alter the reality.”

The President’s visit, part of an eight-day tour of the Middle East, has been met with low expectations by Israelis and Palestinians, who have seen a series of such initiatives come and go over the years. A poll in a leading newspaper revealed that 77 per cent of Israelis doubted that any progress would come out of the initiative, begun at a Maryland peace summit in November.

Repeated warnings by Mr Bush and Condoleezza Rice, his Secretary of State, to Israel about freezing settlements have led some to real signs of encouragement. “It’s extremely important,” said Galia Golan, a political scientist and founder member of the antisettlement Israeli organisation Peace Now. “He understands the Palestinians are not going to accept cantonisation. And he has said that if these guys aren’t serious he’s not going to stick around. That may be the most important message of his visit.”

Ms Golan said that the 12-month deadline that President Bush had set for reaching a deal on key issues such as the status of Jerusalem, Palestinian refugees and the final borders of the two states was realistic.

“I think a year is enough to reach an agreement. The question obviously is the implementation, and that won’t be done in a year,” she said. Ms Golan said that Mr Olmert wanted to start removing some checkpoints within the West Bank but the military was reluctant. Checkpoints add hours to journeys for Palestinians, often cut people off from their workplaces, farmers from their fields and traders from their markets. Palestinians are also banned from certain roads in the West Bank that are reserved for settlers.

Settler groups have protested at President Bush’s demands for outposts to be scrapped and were likely to be even more outraged by his statement after a trip to the church marking the birthplace of Jesus Christ in Bethlehem last night. “There should be an end to the occupation that began in 1967,” he said.

Glossary

Swiss cheese
Phrase used by Mr Bush to describe the dangers of a West Bank with Israeli “holes” – settlements, Israeli-only roads and military installations – cutting Palestinian communities off from each other

Contiguous territory
Though he has occasionally stumbled over the word, Mr Bush insisted that the Palestinian territories must be linked to each other. Ambitious plans have been aired in the past to build a tunnel, bridge or sealed-off highway linking the Gaza Strip to the West Bank.

Bantustans
A highly controversial term, vehemently rejected by Israel but sometimes employed by its critics, to describe the alleged similarity between isolated Palestinian communities and the impoverished black “homelands” of apartheid-era South Africa

Cantonisation
Many peace activists fear that if the US does not lean on Israel to withdraw from the West Bank a future Palestinian state will consist of a multitude of economically isolated cantons without a centralised government to rule them

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