Gulf call for Palestinian state

The GCC summit was overshadowed by a divisive trade dispute

The leaders of the Gulf Co-operation Council (GCC) have urged President Bush to make the creation of an independent Palestinian state an absolute priority.

They said that Mr Bush should adopt a three-year-old Saudi blueprint.

The plan offered Israel normal ties with the Arab world, in return for its withdrawal from all territories captured since the war of 1967.

The statement was issued by the council near the end of its annual meeting, which is being held in Bahrain.

Correspondents say the statement, which covers a number of other issues, did not address one of the key disagreements of the GCC summit - trade.

Bahrain was criticised by Saudi Arabia for signing a bilateral agreement with the US, on the grounds that it would weaken the collective bargaining power of member states.

The GCC leaders also urged the US to "allow all Iraqi factions to exercise their political rights and participate in the upcoming elections".

This may be a reference to the violence in the country which may make it harder for Sunni Muslim Iraqis to vote, correspondents say.

Trade dispute

The trade dispute largely overshadowed of the summit, with Saudi Arabia's de-facto ruler boycotting the meeting.

No official reason has been given for Crown Prince Abdullah bin Abdul Aziz not going to Manama, but Saudi Arabia said the bilateral deal was against conventions of the six-member GCC.

Bahrain argued it had acted within the council's rules.

The GCC is a loose military, political and trading block made up of Bahrain, Saudi Arabia, Kuwait, Oman, Qatar and the United Arab Emirates.

Members are due to adopt a single currency 2010.