PRESIDENT BUSH gave a stern warning to Israel yesterday as he set the bruised transatlantic alliance a series of grand goals for the 21st century.

Mr Bush used the keynote address of his European visit to lay out tough terms for Israel before peace could be established in the Middle East.

He said that Ariel Sharon, the Israeli Prime Minister, must stop all settlement activity in the West Bank. And he went further than ever before in insisting that an Israeli withdrawal from the West Bank had to be large-scale rather than piecemeal.

Referring to the resulting Palestinian state, Mr Bush said: “A state of scattered territories will not work.” The line produced one of the biggest rounds of applause, which was polite if hardly enthusiastic, from the audience of 300 European dignitaries in Brussels.

Mr Bush later delivered his toughest words to Syria since the assassination of Rafik Hariri, the former Prime Minister of Lebanon. He said that Syria had to end its “occupation” of Lebanon, the first time he has described it as such.

The President and Jacques Chirac, the French leader, issued a joint statement telling Damascus to do so before Lebanon’s parliamentary elections this spring.

In the speech, Mr Bush also paid tribute to Tony Blair, thanking him for the “prominent” role he has played in the cause of Middle East peace.

After the divisions over the Iraq war, Mr Bush tried to refocus what he called “our great alliance of freedom” to the pursuit of democracy throughout the Middle East and delivery of food and healthcare to the impoverished people of Africa.

Countries that made up the transatlantic alliance had many advantages and blessings, he said. “We also have a call beyond our comfort. We must raise our sights to the wider world.”

Mr Bush used the speech to tackle criticism that he pursued an aggressive and overly idealistic foreign policy. He said: “Seizing this moment requires idealism — we must see in every person the right and the capacity to live in freedom. Seizing this moment requires realism — we must act wisely and deliberately in the face of complex challenges.”

Stability, a theme sounded by Gerhard Schröder, the German Chancellor, in a landmark foreign policy speech this month, could be over-rated, Mr Bush said. “In the Cold War, Europe saw the so-called stability of Yalta (the division of postwar Europe into communist and capitalist spheres of influence) as a constant source of injustice and fear,” he said. Only the spread of freedom would guarantee Europeans peace.

Mr Bush also delivered a sharp rebuke to President Putin of Russia, whom he is meeting on Thursday in the Slovak Republic. “For Russia to make progress as a European nation, the Russian Government must renew a commitment to democracy and the rule of law,” he said in an elegant reception room in the Concert Noble.

Mr Putin’s authoritarian crackdown against political opponents and civic rights has drawn a muted response from Washington so far. But Mr Bush raised the stakes for their Bratislava summit by urging allies to press Mr Putin to ease the constraints he has placed on the media, the Opposition and on voting. “The United States and all European countries should place democratic reform at the heart of their dialogue with Russia,” he said.

Later, Mr Bush made his message more personal. “I’ve got a good relationship with Vladimir,” he said. “I intend to keep it that way. But as well I intend to remind him that if his interests lie West, that we share values and that those values are important.”

Mr Bush intended the speech to set the tone for what officials from all sides have billed as a lengthy bonding session between old allies to heal the Iraq war rifts.

He used the word alliance 12 times, saying that the relationship was “founded on more than nostalgia”.

Mr Bush referred to the divisions over Iraq in a manner some could have regarded as loaded. “Some European nations joined the fight to liberate Iraq, while others did not,” he said.

EU foreign ministers gave the go-ahead last night for a European training programme for senior Iraqi policemen, prison warders and judges, and asked the European Commission to open a formal Union delegation in Baghdad as soon as conditions permit.

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