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Last Updated: Saturday, 10 May, 2003, 02:07 GMT 03:07 UK
Bush unveils Mid-East trade plan
President Bush speaking at the University of South Carolina
Bush: "the Arab world is... missing out on the economic progress of our time"

President George W Bush has announced plans for a US Middle East free trade area within a decade as part of a drive for peace in the region.

Mr Bush said the aim was to bring the Middle East into "an expanding circle of opportunity" and to reward nations that pursued broad political and economic reforms.

In a major speech to an audience at the University of South Carolina, Mr Bush once again stressed his determination to achieve peace between Israel and the Palestinians, promising an independent Palestinian state.

He was speaking as his Secretary of State Colin Powell embarked on a visit to Israel and the Palestinian-controlled areas in a bid to revive the peace process.

'Tremendous promise'

Mr Bush said he wanted Middle East nations to be able to benefit from the sort of economic prosperity that exists in many other parts of the world.

"The combined GDP of all Arab countries is smaller than that of Spain," he said.

"The Arab world has a great cultural tradition but is largely missing out on the economic progress of our time," he added, announcing his initiative.

The US already has free trade agreements with Israel and Jordan and wants to conclude a trade pact with Morocco by the end of the year.

Mr Bush said that the overthrow of Saddam Hussein presented a moment of tremendous promise which the United States was determined to use.

But the president made it clear that before that could happen, the US wanted to see democracies, human rights and freedom around the world.

US Secretary of State Colin Powell
Powell's team will monitor the "road map" plan implementation

He spoke of the need for major changes in the region - corruption replaced by the rule of law, better education and more rights for Arab women.

The BBC's Rob Watson says that having used the stick of military action to promote democracy in Iraq, Mr Bush is now dangling the carrot of free trade to advance greater freedoms in the rest of the Arab world.

But our correspondent says the question remains as to whether Washington is really prepared to put pressure on its Arab allies to change and whether those allies would be receptive if it is.

Powell's mission

"Arab nations must fight terror in all forms and recognise and state the obvious, once and for all, Israel has a right to exist as a Jewish state at peace with its neighbours," he said.

The president promised that America would work, without tiring, to ensure that the states of Israel and Palestine could live side by side in security, prosperity and peace.

Israeli soldier checks Palestinian man's pass at checkpoint
Both sides remain sceptical about a peaceful settlement

Secretary Powell will be calling on both sides to implement the new peace plan, known as the "road map".

The BBC's Jon Leyne travelling with Mr Powell, says the secretary of state will be trying to strengthen the position of the new Palestinian Prime Minister, Mahmoud Abbas, also known as Abu Mazen, and to encourage the Palestinians to crack down on violence.

Our correspondent says that from the Israeli side, Mr Powell will be looking for corresponding gestures of goodwill and the commitment of the government of Ariel Sharon to the whole process laid out in the "road map".

The White House has already announced that Mr Sharon will have talks with Mr Bush in Washington on 20 May to discuss the main issues of the peace settlement.

The BBC's Jim Fish
"Peace moves are often preceded by an upsurge in violence"

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