PRESIDENT BUSH gave Mahmoud Abbas and Middle East peace hopes a much needed fillip yesterday, offering the Palestinian president a warm White House embrace and hard US cash.

Mr Bush said that $50 million (£27 million) of new housing aid would go directly into Palestinian Authority coffers rather than, as more usually, through third parties. He repeatedly told Israel to stop settlement activity in the West Bank. He will also be sending Condoleezza Rice, the Secretary of State, to Jerusalem and Ramallah as a sign of US support for both sides before Israel’s upcoming withdrawal from the Gaza Strip.

Crucially, he said that the withdrawal must be the signal for both sides to get down to the business of the “road map” and not an end in itself. In return, Mr Abbas told Mr Bush that he left Washington “more confident about the role that you will play and the role that your Administration will play in order to move the process forward and achieve lasting peace”.

Mr Bush said: “You have made a new start on a difficult journey, requiring courage and leadership each day. And we will take that journey together.” He added: “The United States and the international community applaud your rejection of terrorism. You cannot have a democracy based upon rule of law if you have armed bands of people who will use their weapons to try to achieve a political outcome.”

Mr Bush’s measures and rhetoric were designed to boost Mr Abbas ahead of elections in July when his ruling Fatah party faces a serious challenge from Hamas, the militant group considered by the US a terrorist organisation.

The meeting — the first time that Mr Bush has welcomed a Palestinian leader to the White House — was designed to show sceptical Palestinians that the US is committed to securing an independent Palestinian state and that it is prepared to back Mr Abbas with money and diplomatic pressure as long as he shows zero tolerance towards anti-Israeli violence. Mr Abbas had also wanted signed guarantees Israel would not be allowed to keep large parts of the West Bank. But Mr Bush has already promised Ariel Sharon, the Prime Minister of Israel, in writing, that Israel will not have to pull back to the 1967 green line as part of a final settlement.

Mr Abbas did, though, win a degree of backing for a Palestinian state. Mr Bush said: “I believe the Palestinian people are fully capable of justly governing themselves in peace with their neighbours. I believe the interests of the Israeli people would be served by a peaceful Palestinian state. And I believe that now is the time for all parties . . . to move beyond old grievances and act forcefully in a case of peace.”

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