Asked if he thought Mr Arafat’s passing would signal an opening for the peace process, Mr Bush said: “I do.”

Mr Bush has described Mr Arafat as a barrier to peace. He said yesterday he believed the next generation of Palestinian leaders would embrace reforms necessary for the emergence of a Palestinian state, and that the US would respond positively.

“There will be an opening,” said Mr Bush. “I think we have got a chance . . . to look forward and to be involved in that process.”

His comments, on the eve of Tony Blair’s visit to Washington today, are useful to the Prime Minister who is trying to persuade Mr Bush to take a more active role in the peace process.

Mr Bush made his comments shortly after mechanical diggers began clearing the site for Mr Arafat’s grave in Ramallah, and Jean-Pierre Raffarin, the French Prime Minister, said that that Palestinian leader was in his “final hours”.

Mr Arafat lies in deep coma in a French military hospital. Palestinian religious and political leaders insist that they will not turn off the machines keeping him alive.

But at the same time the Palestinians are making preparations for his passing. Yesterday they accepted an offer by Egypt to host Mr Arafat’s funeral in Cairo before his burial in Ramallah. “It was decided that the body will be brought to Cairo and there will lie in state,” said Saeb Erekat, the Palestinian Cabinet Minister.

Workmen in Ramallah began bulldozing a site beneath seven fir trees within the 75-year-old leader’s Muqata compound where he spent more than two years under virtual house arrest. As workmen tore down barricades and lifted away crushed vehicles covering the site, a prominent cleric said he “absolutely rejected” the idea of turning off Mr Arafat’s life-support systems.

“He is sick and his condition is very difficult but he remains alive,” insisted Sheikh Tayseer al-Tamimi, a leading West Bank cleric who said that he saw Mr Arafat’s shoulder move while he read Koranic verses to the Palestinian leader.

Nabil Shaath, the Palestinian Foreign Minister, said that Mr Arafat had been in a coma for a week, was on a respirator, and that his liver and kidney had failed though his heart and lungs were still functioning. Later he said Mr Arafat’s brain was only partially functioning.

But Mr Shaath insisted that “everybody is willing to wait. This man has led the Palestinian people for a long time, therefore there is no talk of pulling plugs or anything like that.”

Eager to quash accusations by Mr Arafat’s wife, Suha, that the Palestinian leadership was “trying to bury Abu Ammar (Mr Arafat) alive”, Mr Shaath said Mr al-Timimi, the cleric, was in Paris as an old friend of Mr Arafat’s. “He will be there when he dies, to deliver the Islamic rites. But contrary to what people say, he is not there to produce a fatwa to allow people to cut his life support.

He’s there for a religious purpose.”

Palestinians are becoming angered by the prolonged confusion, seeing it as an indignity. Many are angry that officials did not challenge Israel’s refusal to let Mr Arafat be buried on Jerusalem’s Haram al Sharif/Temple Mount complex, Islam’s third holiest site.

Yesterday the Israeli Government approved Mr Arafat’s burial in Ramallah.

Meanwhile the Palestinian leadership divided Mr Arafat’s powers, making Ahmed Qureia, the Prime Minister, responsible for the Palestinian Authority and the National Security Council. Mahmoud Abbas, currently Secretary-General of the PLO, will run the PLO and the Palestinian Legislative Council. Rawhi Fatuh, will take over as temporary PA chairman.

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