Extracts from Bush's speech

President Bush had strong words for both sides

US President George W Bush has issued a powerful statement calling for action from both Israel and the Palestinians to halt the current conflict.

The following are extracts from Mr Bush's speech:

"During the course of one week, the situation in the Middle East has deteriorated dramatically. Last Wednesday, my special envoy, Anthony Zinni, reported to me that we were on the verge of a ceasefire agreement that would have spared Palestinian and Israeli lives.

When an 18-year-old Palestinian girl is induced to blow herself up, and in the process kills a 17-year-old Israeli girl, the future itself is dying

That hope fell away when a terrorist attacked a group of innocent people at a Netanya hotel, killing many men and women in what is a mounting toll of terror.

In the days since, the world has watched with growing concern the horror of bombings and burials and the stark picture of tanks in the street.

When an 18-year-old Palestinian girl is induced to blow herself up, and in the process kills a 17-year-old Israeli girl, the future itself is dying, the future of the Palestinian people and the future of the Israeli people.

Terror must be stopped. No nation can negotiate with terrorists, for there is no way to make peace with those whose only goal is death.

Opportunity for peace

This could be a hopeful moment in the Middle East. The proposal of Crown Prince Abdullah of Saudi Arabia, supported by the Arab League, has put a number of countries in the Arab world closer than ever to recognising Israel's right to exist.

To those who would try to use the current crisis as an opportunity to widen the conflict - stay out

This can be a time for hope, but it calls for leadership, not for terror.

You are either with the civilized world or you are with the terrorists. All in the Middle East must choose and must move decisively in word and deed against terrorist acts.

The chairman of the Palestinian Authority has not consistently opposed or confronted terrorists.

Message to terrorists

The situation in which he finds himself today is largely of his own making. He has missed his opportunities and thereby betrayed the hopes of the people he is supposed to lead.

I call on the Palestinian people and the Palestinian Authority and our friends in the Arab world to join us in delivering a clear message to terrorists: Blowing yourself up does not help the Palestinian cause.

I expect better leadership, and I expect results.

To the contrary, suicide-bombing missions could well blow up the best and only hope for a Palestinian state.

All states must keep their promise, made in a vote in the United Nations, to actively oppose terror in all its forms. No nation can pick and choose its terrorist friends.

Action from Israel

Israel faces hard choices of its own.

Consistent with the Mitchell plan, Israeli settlement activity in occupied territories must stop, and the occupation must end through withdrawal to secure and recognise boundaries consistent with United Nations Resolutions 242 and 338.

Israel should also show a respect - a respect for and concern about the dignity of the Palestinian people who are, and will be, their neighbours. It is crucial to distinguish between the terrorists and ordinary Palestinians seeking to provide for their own families.

The Israeli government should be compassionate at checkpoints and border crossings, sparing innocent Palestinians daily humiliation.

Israel should take immediate action to ease closures and allow peaceful people to go back to work.

I ask Israel to halt incursions into Palestinian-controlled areas and begin the withdrawal from those cities it has recently occupied.

Palestinian responsibilities

As Israel steps back, responsible Palestinian leaders and Israel's Arab neighbours must step forward and show the world that they are truly on the side of peace.

The world expects an immediate cease-fire, immediate resumption of security co-operation with Israel against terrorism, and an immediate order to crack down on terrorist networks.

I expect better leadership, and I expect results.

And to those who would try to use the current crisis as an opportunity to widen the conflict - stay out. Iran's arms shipments and support for terror fuel the fire of conflict in the Middle East, and it must stop.

Syria has spoken out against al-Qaeda. We expect it to act against Hamas and Hezbollah, as well.

It is time for Iran to focus on meeting its own people's aspirations for freedom and for Syria to decide which side of the war against terror it is on.

American support

The Middle East has often been left behind in the political and economic advancement of the world. That is the history of the region, but it need not - and must not - be its fate.

The Middle East could write a new story of trade and development and democracy. And we stand ready to help.

Yet this progress can only come in an atmosphere of peace. And the United States will work for all the children of Abraham to know the benefits of peace".