President George W Bush has said the US will unveil the long-delayed road map for peace as soon as the Palestinian Authority appoints a prime minister "with real authority".
Mr Bush said this is a "hopeful moment"
In a brief statement from the White House, President Bush said he expected that to take place soon.
In what appeared to be a co-ordinated move, UK Prime Minister Tony Blair announced immediately afterward that the plan could lead to a viable Palestinian state soon.
Mr Blair has worked hard to push for Palestinian reform at a time when the US - preoccupied with the Iraq crisis - has not been taking the lead.
ROAD MAP: KNOWN KEY POINTS
End of Palestinian violence against Israelis
Israel to begin withdrawal from Palestinian areas re-occupied since September 2000
Reform of Palestinian institutions including leadership
Freeze in Jewish settlement building
Proposed peace monitors
"Provisional" Palestinian state in 2003
Peace treaty by 2005
"We are right to focus on Saddam Hussein... but we must put equal focus on the people whose lives are being devastated by the lack of progress in the Middle East peace process," Mr Blair said.
Israel has said it shared Mr Bush's vision, while the Palestinians expressed their disappointment.
"We are of the conviction that once there is a Palestinian prime minister with real powers who will begin fighting to stop terror then Israel will be willing to begin discussing a solution," an Israeli Foreign Ministry spokesman said.
But senior Palestinian negotiator Saeb Erekat said that all the steps had already been made to appoint a prime minister, and that he had expected Mr Bush to announce the immediate publication of the road map.
Mr Bush's statement was hailed by European Union foreign policy chief Javier Solana, who said "the road map which is going to be released is the road map we approve".
France described the statement as "an important step", adding that Paris has been calling for such a development for months.
"This process... can open the way to a resolution of this conflict, in which two peoples are tearing each other apart in a bloody confrontation with no way out," the French foreign ministry said in a statement.
Last week, the Palestinian Authority's leader Yasser Arafat nominated his long-time deputy Mahmoud Abbas - also known as Abu Mazen - to be prime minister.
Palestinian bodies moved swiftly to approve the position and Mr Abbas's nomination.
But Mr Abbas has said he will not accept it until it is clear what his powers will be.
Mr Blair said in London that Mr Abbas could take office as soon as next week, citing recent phone conversations with Mr Bush and Mr Arafat.
Mr Arafat had been under pressure from the so-called Quartet of Middle East mediators - the US, European Union, United Nations and Russia - to surrender some power as a step towards reform of the Palestinian Authority.
End settlement activity
In his statement, Mr Bush also said that Israel must stop settlement activity in the occupied territories.
"As progress is made toward peace, settlement activity in the occupied territories must end," he said.
The BBC's James Reynolds in Jerusalem says that despite publicly supporting Mr Bush's statement, in private the Israelis will have a number of reservations.
Our correspondent says they will be concerned Mr Bush may be nodding towards the European position on the Middle East, which favours stronger pressure on Israel to achieve peace.
Mr Bush also urged all sides to the conflict - Israel, the Palestinians, and the Arab states - to act "in good faith" in relation to the establishment of a Palestinian state.
He first announced his support for a Palestinian state in June of last year - making him the first US president to commit himself to a "viable Palestine".
Mr Bush said on Friday that the future state "must be reformed and democratic and abandon terror".
"Arab states must support a peaceful and democratic Palestine and live with Israel," Mr Bush said.
Mr Bush said the parties had "reached a hopeful moment for progress toward the vision of Middle Eastern peace".
But the BBC's Rob Watson in Washington says the timing of the announcement has more to do with shoring up Arab support in advance of a possible war with Iraq.