He and other foreign ministers from the Group of Eight industrial nations urged leaders to pay more attention to education, boosting employment and broadening democracy.

At an inaugural conference in Rabat intended to spur economic and political reform in the Middle East, General Powell addressed officials of more than 20 Islamic countries.

America promised a suspicious Arab world that it would offer training, investment and loans to underpin democratic reform, but ran up against complaints that Washington was doing too little to resolve the Israeli-Palestinian conflict.

General Powell said that the Bush Administration was committed to working with Palestinians and Israelis to end the conflict, but “reform does not have to wait for that”.

“Now is not the time to argue about the pace of democratic reform or whether economic reform must precede political reform,” he said.

“All of us confront the daily threat of terrorism. To defeat the murderous extremists in our midst, we must work together to address the causes of despair and frustration that extremists exploit for their own ends.”

Arab leaders said, however, that the West must first take steps to end the Palestinian- Israeli dispute. Prince Saud al-Faisal, the Saudi Foreign Minister, spoke of Arab bitterness at what was seen as the West’s bias towards Israel. This was “a real bone of contention”.

The four-hour conference produced little agreement on priorities or a new co-operation between East and West. Outside the parliament in Rabat about 500 demonstrators denounced American support for Israel. Activists said that the meeting legitimised “American military aggression on the Arab and Muslim world”. Iran boycotted the meeting.

The Bush Administration said that it was ready to pay huge sums to boost education and investment in the region. John Snow, the US Treasury Secretary, proposed adding $40 million over the next three years to a $60 million regional fund recently set up by the World Bank’s private-sector investment arm to provide training and technical help to small and medium-sized businesses. “With your support, more is on the way,” he said.

Morocco, the host of the meeting, tried to distance itself from calls for political reform, and newspapers declared the meeting a flop.

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