Bush calls for end to Arafat's rule

Mr Bush has been unwillingly drawn deep into Mid-East diplomacy

President George W Bush has urged the Palestinian people to replace Yasser Arafat, who has led them for more than 30 years, with a leader "not compromised by terror".

Unveiling a long-awaited policy statement on how to end the Middle East conflict, the US president said peace required a "new and different Palestinian leadership" which could lead the Palestinians to their own state.

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When the Palestinians have new leaders, institutions and security arrangements, the US will support the creation of a Palestinian state

George W Bush

"If Palestinians embrace democracy, confront corruption, and firmly reject terror, they can count on America's support for creation of a provisional state of Palestine," he said.

Just hours after the speech Israeli tanks swept into the West Bank city of Hebron sparking clashes with Palestinian gunmen, Palestinian security authorities and witnesses said.

The security authorities reported that two Palestinians were killed in the exchanges of fire in the city.

Hebron is the seventh West Bank town the Israeli army has moved into as it continues an offensive it says is aimed at curbing a recent resurgence of suicide bombings.

Palestinian statehood

In his speech Mr Bush said US support for provisional Palestinian statehood would only come after the Palestinians elected new leaders, built new institutions and new security arrangements to protect Israel from terrorist attacks.

The future borders of the Palestinian entity and "certain aspects of its sovereignty" would be provisional until resolved as part of a final settlement in the Middle East.

The announcement comes a week after back-to-back Palestinian suicide bombings against Israel - which delayed the speech - and against the backdrop of a major Israeli incursions into Palestinian-controlled land.

Mr Bush did not mention Yasser Arafat by name, but he made it clear that he believes the Palestinian leader and his administration entirely responsible for the current bloodshed.

The Palestinian leader reportedly welcomed the Bush speech as a "serious effort to push the peace process forward", in a statement that ignored the US call for a new leadership.

Return to talks

Mr Bush said the issues of Jerusalem and Palestinian refugees, as well as ending the Israeli occupation, must be settled by negotiations between the two sides.

Palestinians say Israeli raids are collective punishment

He reasserted Israel's right to defend itself against the "forces of terror", but he called on the Israelis to take concrete steps by halting settlement activity and withdrawing troops "as we make progress towards security".

Officials in Washington said that if Mr Bush's conditions were met, a provisional Palestinian state could be established in 18 months and then made permanent in about three years as part of a final Middle East settlement.

Saeb Erekat, a senior Palestinian aide, insisted that Mr Arafat was the Palestinians' "directly elected leader in free and fair elections... and President Bush must respect the choice of the Palestinian people".

The speech has been greeted with satisfaction in Israel, despite its stated opposition to Palestinian statehood. Prime Minister Ariel Sharon has refused negotiations with Mr Arafat, declaring him "irrelevant" to the peace process.

Besieged leader

Earlier, Mr Arafat condemned Israel's incursions, as tanks surround his battered West Bank headquarters in Ramallah.

He said the Israeli Government had "revealed to the world its real intentions as well as its expansionist goals and has ridiculed our calls for peace".

BBC correspondents say that a curfew has been put into effect in Ramallah and the streets are deserted, with residents stockpiling food as the Israeli military appears to be preparing to stay.

Israel's crackdown on Palestinian militants spread to the Gaza Strip on Monday, with a helicopter missile strike that killed six Palestinians including two alleged militant leaders.

The Israeli cabinet has authorised the army to take Palestinian-administered territory and hold it until suicide attacks are halted.

Israel's incursion in Hebron and Ramallah followed similar incursions in Qalqilya, Bethlehem, Jenin, Nablus and Tulkarm.