Comprehensive, frank talks between King Abdullah of Saudi Arabia, U.S. President Bush on bilateral ties, regional developments

Saudi Arabia, U.S. sign memo on cooperation in nuke energy field, combating terrorism, WMDs

Bush discusses with Egypt's President Mubarak Palestinian issue, Middle East developments

Bush reiterates in Sharm el-Sheikh pledge to set up Palestinian state, support for legitimacy in Lebanon

U.S. president links Israelis' security to Americans', lashes out at Iran

Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz and President George W. Bush of the United States of America co-chaired the talks held in Custodian of the Two Holy Mosques' ranch in Al-Jnadreyah, near Riyadh.

At the outset of the session, the Custodian of the Two Holy Mosques welcomed the US president wishing him and the accompanying delegation a good stay in the Kingdom of Saudi Arabia.

On his part, the US president thanked the Custodian of the Two Holy Mosques for the hospitality.

Then, they discussed ways of boosting cooperation between the two friendly countries in various fields to serve their common interests.

The two sides also discussed the current situation in the Middle East topped by the Palestinian issue and the situation in Lebanon and Iraq.

The talks were characterized by comprehensiveness, depth and frankness.

On the Saudi side, the talks were attended by attended by Prince Abdulrahman bin Abdulaziz, Deputy Minister of Defense and Aviation and Inspector General; Prince Miteb bin Abdulaziz, Minister of Municipal and Rural Affairs; Prince Naif bin Abdulaziz, Minister of Interior; Prince Salman bin Abdulaziz, the Governor of Riyadh region, Prince Saud Al-Faisal, Minister of Foreign Affairs; Prince Abdulilah bin Abdulaziz; Prince Sattam bin Abdulaziz, Vice Governor of Riyadh region; Prince Miqren bin Abdulaziz, Chief of General Intelligence, and a number of other princes, ministers and officials.

On the US side, the talks were attended by US ambassador to the kingdom Ford Fraker, US secretary of state Condoleezza Rice and other US officials.

Afterwards, Custodian of the Two Holy Mosques and the US president attended the signing of a Saudi-US agreement on technological cooperation. On the Saudi side, the agreement was signed by Prince Naif bin Abdulaziz, the Interior Minister, and on the US side, it was signed by US secretary of state Condoleezza Rice.

A Saudi-US memorandum of understanding on cooperation in the field of nuclear energy and other energy fields was also signed by Prince Saud Alfaisal, the Foreign Minister, on the Saudi side and US secretary of state Condoleezza Rice on the US side.

The signing ceremony was attended by Prince Abdulrahman bin Abdulaziz, Deputy Minister of Defense and Aviation and Inspector General; Prince Miteb bin Abdulaziz, Minister of Municipal and Rural Affairs; Prince Naif bin Abdulaziz, Minister of Interior; Prince Salman bin Abdulaziz, the Governor of Riyadh region, Prince Saud Al-Faisal, Minister of Foreign Affairs; Prince Abdulilah bin Abdulaziz; Prince Sattam bin Abdulaziz, Vice Governor of Riyadh region; Prince Miqren bin Abdulaziz, Chief of General Intelligence, and a number of other princes, ministers and officials.

The signing ceremony was also attended by members of the official delegation accompanying the US president. Afterwards, the Custodian of the Two Holy Mosques accompanied his guest, the US president, to the residence place prepared for his stay at the ranch of the Custodian of the Two Holy Mosques in Al-Jnadreyah.

The Custodian of the Two Holy Mosques presented to the US president a gift which is a pair of Arabian oryx. President Bush thanked the Custodian of the Two Holy Mosques for the gift which he considered as a valuable gift from the Custodian of the Two Holy Mosques to the people of the US.

On the occasion, the US president presented to the Custodian of the Two Holy Mosques a gift, which is a model of the bird of falcon.

A U.S. official said on Friday that Saudi Arabia reiterated it would pump as much oil as needed to meet demand from customers, but said this was unlikely to lead to any drop in fuel prices in the United States.

For now, the world's top oil exporter sees no unmet demand for its oil, the official said.

President Bush met Saudi King Abdullah in Riyadh on Friday to seek Saudi help to tame record oil prices. The U.S. official briefed the press after the meeting.

The White House announced major new cooperation agreements with Saudi Arabia on Friday as President Bush made his second visit to the oil superpower this year, according to AFP.

The agreements cover cooperation on civil nuclear power and protecting the kingdom's oil infrastructure which has come under attack by Islamist militants.

"The Saudis bear a special responsibility for protecting key energy facilities of global importance and the world benefits from their abundant energy supplies," a White House statement said.

"Our global economy depends greatly on Saudi Arabian energy. The United States has a keen interest in helping the Saudis protect their energy infrastructure against terrorism, as demonstrated by the unsuccessful terrorist attack against the kingdom's Abqaiq plants in February 2006," it said.

"To this end, the United States and Saudi Arabia have agreed to cooperate in safeguarding the kingdom's energy resources by protecting key infrastructure, enhancing Saudi border security, and meeting Saudi Arabia's expanding energy needs in an environmentally responsible manner."

Saudi Arabia sits on around a quarter of the world's oil reserves and is by far its biggest producer with an output of some nine million barrels per day.

The White House said Washington and Riyadh were also to sign an agreement on nuclear cooperation that would clear the way for Saudi Arabia to receive enriched uranium for its reactors, without the need to master the fuel nuclear cycle itself as Iran has done.

"This agreement will pave the way for Saudi Arabia's access to safe, reliable fuel sources for energy reactors and demonstrate Saudi leadership as a positive non-proliferation model for the region," it said.

Washington charges that Iran's nuclear program is cover for a drive to develop an atomic weapon, a charge denied by Tehran.

Uranium enrichment, the process which can produce for fuel for nuclear power stations -- or, in highly extended form, the fissile core of an atomic bomb -- lies at the centre of US concerns.

President Bush had arrived in Riyadh on a two-day visit to the Kingdom. Upon arrival at King Khalid International Airport, the U.S. President was received by King Abdullah who welcomed him and the accompanying delegation to the Kingdom.

The U.S. President was also received by Prince Salman bin Abdulaziz, the Governor of Riyadh region; Chief of Royal Protocol Mohammed bin Abdulrahman Al-Tibeishi; Saudi Ambassador to the United States of America Adel bin Ahmed Al-Jubeir and U.S. Ambassador to the Kingdom Ford Fraker.

Then the President shook hands with Prince Abdulrahman bin Abdulaziz, Deputy Minister of Defense and Aviation and Inspector General; Prince Miteb bin Abdulaziz, Minister of Municipal and Rural Affairs; Prince Naif bin Abdulaziz, Minister of Interior; Prince Saud Al-Faisal, Minister of Foreign Affairs; Prince Sattam bin Abdulaziz, Vice Governor of Riyadh region; Prince Miqren bin Abdulaziz, Chief of General Intelligence; Prince Faisal bin Abdullah bin Mohammed Al Saud, Assistant Chief of General Intelligence; Prince Bandar bin Sultan bin Abdulaziz, Secretary General of National Security Council; Prince Mohammed bin Naif bin Abdulaziz, Assistant Minister of Interior for Security Affairs; Prince Mansour bin Nasser bin Abdulaziz, Adviser to the King; Prince Dr. Bandar bin Salman bin Mohammed Al Saud, Adviser to the King; Prince Abdulaziz bin Fahd bin Abdulaziz, Minister of State, Cabinet's Member, Chief of the Court of Cabinet's Presidency; ministers; senior officials and members of the U.S. embassy in the Kingdom.

The delegation accompanying the President includes Mrs. Laura Bush, the Wife of the U.S. President; Condoleezza Rice, Secretary of State and a number of officials.

King Abdullah held in his ranch in Al-Jnadreyah, near Riyadh, a luncheon in honor of President Bush and his accompanying delegation.

Prince Saud Al-Faisal, the Foreign Minister, said the talks held between the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz Al Saud and U.S. President George W. Bush were comprehensive, deep and candid.

He added that the outcome of these talks yielded promoted bilateral relations by signing an agreement for technical cooperation in the field of installations and infrastructure security and the signing of a memorandum of understanding for cooperation in the field of nuclear energy and other energy fields. He said that the two sides also exchanged diplomatic notes on completion of discussing the text of the scientific and technical cooperation agreement, to be signed in the near future.

In a joint press conference with the Minister of Petroleum and Mineral Resources Eng. Ali bin Ibrahim Al-Naimi, Prince Saud Al-Faisal expressed, on the occasion of President Bush's visit, the Kingdom's welcome of the statement of principles on the Global Initiative to Combat Nuclear Terrorism, as well as the Security Initiative of weapons proliferation and ban principles. He said this comes within the Kingdom's support for the international and regional efforts to distance the Middle East and the Gulf region and the world from the threat of proliferation of nuclear weapons and weapons of mass destruction as a whole.

Following is the text of the statement delivered by Prince Saud Al-Faisal at the outset of the press conference:

"In the name of God, Most Gracious, Most Merciful,

On behalf of the Custodian of the Two Holy Mosques, it is my pleasure to reiterate welcome of the President of the United States of America and his accompanying delegation to the Kingdom of Saudi Arabia.

All over the years, Saudi-American relations have witnessed great strides in the service of mutual interests, and promoting bilateral cooperation in economic, commercial, technical, cultural an other fields.

Through these historic and strategic relationships, we have dealt with several international and regional challenges that we encountered together with continuous cooperation, consultation and coordination, within the framework of our shared objectives for fostering international peace and security.

This same spirit prevailed during the talks that were carried out between the Custodian of the Two Holy Mosques and President Bush, which were comprehensive, deep and candid. The outcome of these talks yielded promoted bilateral relations by signature of an agreement for technical cooperation in the field of installations and infrastructure security. We also signed a memorandum of understanding for cooperation in the field of nuclear energy and other energy fields. The two sides also exchanged diplomatic notes on completion of discussing the text of the scientific and technical cooperation agreement, to be signed in the near future.

Under the exhaustive examination of regional and international situations and their developments, there will be a major focus on the peace process in talks of the Custodian of the Two Holy Mosques and the U.S. President this evening.

I would like to point out that the Kingdom of Saudi Arabia has followed with interest the American President's speech in the Israeli Knesset. We are all aware of the special U.S. Israeli relation and its political dimensions. It is, however, important also to affirm the legitimate historical and political rights of the Palestinian people under international law and its legitimate resolutions, which are still confiscated by the Israeli occupation.

We fully agree with vision mentioned by His Excellency (the US President) on the right of peoples to justice, tolerance, freedom and hope. The Palestinian people are in dire need to enjoy these rights and principles from which it was deprived over sixty years. Perhaps the size of the humanistic suffering weighed upon the West Bank and Gaza Strip population, is the biggest proof of that under the policy of collective punishment practiced against it.

We believe that stressing the right of a nation to exist should not strike out or revoke the legitimate rights of other nation. Hence comes the importance of the meeting in Annapolis in its emphasis on the comprehensive, permanent and just solution to the ongoing conflict, based on the principle of guaranteeing the rights of Israeli and Palestinian peoples to two independents States living side by side in security, peace and accord.

Undoubtedly, Israel's continued policy of expanding settlements on Palestinian territories, and its unilateral actions would further complicates the situation and disrupt the peace process.

As regards the Lebanese crisis, we must praise the efforts of the Arab Committee, which resulted in the detente (ease) in the Lebanese crisis. We hope the measures for opening Beirut international airport and harbor, and all roads, and return of the situation to what it was before the recent events, and not to recur.

The Kingdom expresses its support of the agreements reached based on the Lebanese Constitution and the Taif Agreement. The Kingdom emphasizes that the real test depends on the full and comprehensive application of the provisions of this agreement, especially in terms of rejecting the use of armed violence to achieve political ends.

The Kingdom also sees the importance of ensuring that this weapon will not be reused against the Lebanese people, so that dialogue can realize its objectives in permanent solution to the crisis without any pressure and away from the threat of arms, together with emphasis on ensuring the most important sovereign rights of the state; i.e. preservation of peace and declaration of war, and strengthening its capabilities with all legitimate means to enable it undertake this responsibility.

We also stress abidance by the constitutional underpinnings and elements of the comprehensive consensus solution of the Arab Initiative. The Arab Initiative provides for the immediate commencement of election of the consensus President Gen. Michel Suleiman, and forming a national unity government, and beginning the review of the election law.

With regard to Iraq, we believe that the recommendations of the recent expanded meeting of neighboring countries in Kuwait, constituted an appropriate framework to address the situation in Iraq in the light of the recent developments, particularly with regard to the call to expedite the launch of an all-inclusive political process that accommodates all Iraqis without exception.

We support the Iraqi government attitude towards uncovering the facts about external interference, which should be dealt with decisively, so as not to hamper the efforts of the Iraqi government and international efforts to achieve Iraq’s security and stability, preserve the unity, independence, sovereignty and territorial integrity.

Finally, I would like to express the Kingdom’s welcome of the statement of principles on the Global Initiative to Combat Nuclear Terrorism, as well as the Security Initiative of weapons proliferation and ban principles. The Kingdom’s support for the international and regional efforts to distance the Middle East and the Gulf region and the world from the threat of proliferation of nuclear weapons and weapons of mass destruction as a whole. Our support of the initiatives calls for the need to subject all the peaceful uses of nuclear energy for the standards and measures of the IAEA and under its supervision.

Then Prince Saud Al-Faisal and the Minister of Petroleum and Mineral Resources answered questions of the press. In response to question on accusations to the Kingdom that it sided one party of the Lebanese conflict, he said the Kingdom's position towards the Lebanese crisis is firm; that's to have the same distance towards all parties without siding any of them. However, he said "but we cannot stand on the same distance from he who is right and he who is not as there is wrong measure and correct measure".

Prince Saud considered the use of force to reach political objectives as a wrong measure. He said Lebanese arms should not be targeting Lebanese people. This position is not considered by us as partiality as we would have taken the same position if the move was carried out by the other party, he stated.

He said Prime Minister Fouad Siniora represents the Lebanese legitimacy. There was a confirmation to support the international legitimacy according to a resolution by the Arab League and this will remain in force until the Lebanese legitimacy changes as a result of elections, he said. In response to a question on the support of the U.S for the Lebanese agreement patronized by the Arab quartet, Prince Saud said there is a welcome by the U.S. side of that agreement, hoping it would soon be implemented.

On the call by some Lebanese parties to make some changes on Taif Agreement, Prince Saud said Lebanese are aware of what concerns them.

On the results reached by the Arab Quartet in its meeting to solve the Lebanese crisis, he said that that widely reflects the comprehensive resolution recently reached by the Arab League. He said some points should have been more elaborated. For instance, on the issue of weapons, the statement should have been more explicit than it was.

However, I think this issue was widely discussed during negotiations which have been held so far and would be discussed thoroughly in view of the talks to be led by the Arab League.

On the way of protection stated in the agreement between the Kingdom and the United States for protecting oil installations, Prince Saud said the agreement covers training and exchange of experience, confirming that there would be no party to protect the installations other than the Saudis.

On the wish of the Kingdom to have a diplomatic presence in Iraq amid the current incidents, the Minister of Foreign Affairs said "If security prevails, we will send the ambassador. However, the Arab presence is there in Iraq.

We called for an Arab League meeting in Baghdad as an evidence for our wish in an Arab presence in the once-capital-for- centuries of Arab and Islamic nations. We are keen on being there and we are confident that security would prevail. When that happens, Arab embassies will move to Baghdad. Meanwhile, contacts between the Arab countries, Arab League and Iraq would continue and proceed, he added.

Prince Saud Al-Faisal expressed hope that a peace agreement would be reached prior to the end of the term of office of US President George W. Bush later this year. Referring to the Memorandum of Understanding (MOU) between the Kingdom of Saudi Arabia and the US government on cooperation in the field of nuclear energy, he said 'it is a message for anyone, and the Kingdom of Saudi Arabia will produce peaceful nuclear energy and beyond.'

On the criticism of some American politicians about the Kingdom's cooperation in combating terrorism, oil and peace in the Middle East, Prince Saud called the critics to visit the Kingdom to see for themselves what the Kingdom did in this respect in the recent years.

"The Kingdom's cooperation with America and the concerned official agencies is unmatched at the international level, " he said, adding that 'Come to us and discuss these topics, and let us cooperate together and decide what should be done in this respect, " Prince Saud said.

On his part, Minister of Petroleum and Mineral Resources Eng Ali al-Naimi said the Kingdom raised its oil production during May by 300,000 barrels per day to meet the demand of its customers in the US.

"In June, 2008, the production will reach 9,460,000 barrels per day. The Kingdom has been receiving monthly requests from its customers across the world, and on May 10, we raised the supplies to our customers by 300,000 barrels per day in line with their requests," he added.

Al-Naimi made it clear that the request for additional oil has come from about 50 customers, and most of the requests, which we have positively responded to them, have come from the US," he noted.

On the calls for decreasing supplies of heavy oil due to decline of demand for it, he said demand for heavy oil is high, but the problem is in the quality of the refineries which don't match the oil supplies.

He reiterated the readiness of the Kingdom to meet the requests of its customers for light and heavy oil. Al-Naimi pointed out that the Kingdom will spend within the next four years $90 billion to increase its oil production to 12.5 million per day by the end of 2009 in addition to building three refineries for production of one million barrel per day for international export.

Al-Naimi shed light on the Kingdom's oil investments in the US notably at the refinery of Fort Arthur in Texas.

US President George W. Bush has arrived in the Red Sea resort of Sharm-el-Sheikh for talks with his Egyptian counterpart, Hosni Mubarak and Palestinian President Mahmoud Abbas. Their talks were expected to focus on the Israeli blockade of the Gaza Strip and the Middle East peace process.

On Friday, Bush failed to convince Saudi Arabia to increase oil production. This is the second time this year that Saudi officials have rebuffed an appeal from Bush to step up production in an effort to bring down global oil prices.

However, following a meeting between Bush and Saudi King Abdullah in Riyadh, Saudi officials said that they had recently increased oil production by 300,000 barrels per day. Meanwhile, the price of a barrel of oil has hit a new record high of more than US $127.

U.S. President George Bush and Egyptian President Hosni Mubarak discussed the situation in the Middle East and efforts to boost faltering peace talks between Israelis and Palestinians in the Egyptian Red Sea resort of Sharm el-Sheik on Saturday.

Bush arrived in the resort on May 17 for two days of talks with Arab leaders including Palestinian leader Mahmoud Abbas and Jordan's King Abdullah II. He is expected to meet Abbas and Abdullah plus a number of Iraqi officials on Sunday.

The talks come shortly after Bush's visit to Israel for the Jewish state's 60th anniversary celebrations.

Israeli Defense Minister Ehud Barak is also present in Sharm el-Sheik and is expected to press Arab leaders to pressure the radical Islamic group Hamas to include the release of the captured Israeli soldier, Gilad Shalit, among the terms for a ceasefire in Gaza.

Shalit was seized by Palestinian militants in a cross-border raid almost two years ago. Hamas has ruled Gaza since last June.

Bush has stated that he would like to see an Israeli-Palestinian peace deal in place before he leaves office next January. Israel and the Palestinian National Authority pledged in a U.S.-sponsored meeting in Annapolis, Maryland last year to resume peace talks, draft a settlement plan by late 2008, and come to terms on the form of a future independent Palestinian state. However their talks have so far made little tangible progress.

Egyptian media has severely criticized Bush's speech in front of the Israeli legislature, the Knesset, on Thursday, saying that his address, during which he spoke of, "My country's admiration for Israel," proved that the U.S. president was only interested in "appeasing" Tel Aviv.

Bush said on Saturday Lebanon was facing a "defining moment" and pledged that the United States would stand by the pro-Western government of Prime Minister Fouad Siniora against Hezbollah.

Speaking to reporters on a visit to Sharm el-Sheikh, Bush accused "radical elements" of trying to undermine the Lebanese government. "It's a defining moment," he said.

Bush said nations should unite to stop Iran from acquiring nuclear weapons and to oppose Iranian-backed Hezbollah militants who threaten the stability of Lebanon.

"Every peaceful nation in the region has an interest in opposing Iran's nuclear weapons ambitions,'' Bush said in a speech to a World Economic Forum conference in Sharm el-Sheikh, Egypt. "To allow the world's leading sponsor of terror to gain the world's deadliest weapon would be an unforgivable betrayal of future generations. For the sake of peace, the world must not allow Iran to have a nuclear weapon.''

United Nations sanctions on Iran to thwart its nuclear ambitions haven't stopped it from proceeding with the program. With only eight months left in office, the Bush administration is working with allies at the UN Security Council on a revised package of incentives to try to persuade Iran to abandon uranium enrichment and other nuclear activities.

Bush's speech capped a five-day trip to the Middle East that included stops in Israel and Saudi Arabia. His speech addressed the need to spread democracy in the Middle East -- a cornerstone of his administration's policy for the region since 2001 -- and the prospect of an agreement outlining what a Palestinian state will look like by the time he leaves office.

President Bush celebrated Israel’s 60th anniversary on Thursday, assuring the Jewish state that America will always stand by it in the battle against terror and extremism.

“Some people suggest if the United States would just break ties with Israel, all our problems in the Middle East would go away,” the president noted in his speech to the Israeli parliament in Jerusalem. “This is a tired argument that buys into the propaganda of the enemies of peace, and America utterly rejects it.”

Bush said the fight against terror and extremism “is the defining challenge of our time” and that when the nation of Israel is confronted by terror and evil, they “are 307 million strong, because the United States of America stands with you.”

“[T]hey (the killers) reserve a special hatred for the most ardent defenders of liberty, including Americans and Israelis,” the president stated in his speech commemorating of the day when Israel was created and Palestinians bitterly lost claim to the land. “And that is why the founding charter of Hamas calls for the ‘elimination’ of Israel. And that is why the followers of Hezbollah chant ‘Death to Israel, Death to America!’ That is why Osama bin Laden teaches that ‘the killing of Jews and Americans is one of the biggest duties.’ And that is why the President of Iran dreams of returning the Middle East to the Middle Ages and calls for Israel to be wiped off the map.

“The killers claim the mantle of Islam, but they are not religious men,” Bush asserted. “No one who prays to the God of Abraham could strap a suicide vest to an innocent child, or blow up guiltless guests at a Passover Seder, or fly planes into office buildings filled with unsuspecting workers. In truth, the men who carry out these savage acts serve no higher goal than their own desire for power. They accept no God before themselves.”

The president referred to the relationship between Israel and the United States as an “unbreakable” alliance and a “friendship [that] runs deeper than any treaty.”

“America stands with you in breaking up terrorist networks and denying the extremists sanctuary,” Bush said. Notably missing from the president’s speech, for the most part, were remarks about the high-profile Israel-Palestinian peace talks that the United States is brokering and which seek to create a Palestinian state before Bush leaves office in January.

Bush made only fleeting comments about the important peace talks during his address.

In one such comment, the president said the Palestinian people “will have the homeland they have long dreamed of and deserved – a democratic state that is governed by law, and respects human rights, and rejects terror.”

But Hamas, the Palestinian Islamist group that took over the Gaza Strip last summer, denounced Bush as sounding “like a priest or a rabbi” after receiving news about his speech to Israel.

They also said that Bush’s speech was a “slap in the face” to Palestinians who had placed hope in his administration to mediate a fair negotiation with Israel.

On Friday, Bush ended his three-day trip to Israel with a visit to Jerusalem’s Bible Lands museum, which displays artifacts dating back to biblical times. He then headed off to Saudi Arabia for talks about the record high oil prices that have hit the United States, according to Agence France-Presse.

U.S. President George W. Bush told the Israeli Knesset Thursday that those who would talk with Iran or Syria were guilty of "appeasement" of a kind that once emboldened Hitler.

The remark was widely interpreted as a thinly veiled attack on Democratic presidential candidate Barack Obama, who has said the U.S. should not exclude talking with Iran or Syria.

"Some seem to believe that we should negotiate with the terrorists and radicals, as if some ingenious argument will persuade them they have been wrong all along," Bush said. "We have heard this foolish delusion before. As Nazi tanks crossed into Poland in 1939, an American senator declared: "Lord, if I could only have talked to Hitler, all this might have been avoided.

"We have an obligation to call this what it is - the false comfort of appeasement, which has been repeatedly discredited by history."

Much of the president's speech to the Israeli legislators was about Iran's nuclear ambitions, the menace of terrorism and how democracies would defeat it.

"To permit the world's leading sponsor of terror to possess the world's deadliest weapon would be an unforgivable betrayal of future generations," Bush said during a speech that was the focal point of a three-day trip to the Holy Land to share in Israel's celebrations of the 60th anniversary of its creation.

"For the sake of peace the world must not allow Iran to have a nuclear weapon."

Bush again pledged to help Israel remain secure. Israel was not a nation of seven million alone against its enemies, he said, but rather "when you confront terror and evil, you are 307-million strong because America stands with you."

Bush described Israel as "the freest democracy in the Middle East" and said that it was his "bold vision" that by the time the Jewish state was another 60 years older there would also be democracy in Syria and Iran.

The president also forcefully denounced anti-Semitism. "We believe that religious liberty is fundamental to civilized society so we condemn anti-Semitism in all forms whether by those who openly question Israel's right to exist, or by others who quietly excuse them," he said.

"Some people suggest that if the United States would just break ties with Israel, all our problems in the Middle East would go away."

In his second visit in four months after not setting foot here during the first seven years of his presidency, politicians and commentators alike have hailed Bush as one of the country's most loyal friends ever. At the same time there has been much comment that the next U.S. president may not be nearly as supportive of Israel as Bush has been.

Before Bush addressed the Knesset, his host, Prime Minister Ehud Olmert, also spoke of the scourge of extremism and described Iran as "the greatest threat to world peace."

The prime minister, who is fighting for his political life against mounting bribery allegations, singled out "the murderous, fundamentalist threat of terror, which is devoid of any moral inhibitions, (as) the most important challenge currently facing democratic societies around the globe. "The outcome of this confrontation will have far-reaching repercussions on the future and the way life of the free world. You, Mr. President, will be remembered as the man who courageously and without hesitation took the reins of leadership and stood firmly and determinedly against this formidable challenge."

Referring to Iran, Olmert said that while Israel did not rule out military action, "presenting a united international, political and economic front (and) more severe and effective sanctions is a necessary even if not final step" to curb the threat.

The Israeli leader recalled that it was the U.S. which was the first country to recognize his country when David Ben Gurion declared its independence in 1948; that the U.S. had provided arms when the Soviet Union gave weapons to Israel's enemies; and that when Bush's father was president he had helped Ethiopian Jews emigrate to Israel.

"The deep-rooted friendship between the United States and Israel is not an accidental one, and it cannot be taken for granted," Olmert said. "It is a friendship predicated on shared values and on a moral, human and social destiny, the main principles of which are individual liberty, social justice and peace."

Bush spent the morning touring the ruins of a 2,000-year-old Roman fortress at Masada near the Dead Sea. He, Olmert and their entourages rode a cable car up a steep cliff to the place where nearly 1,000 Jews committed suicide rather than surrender to Roman legions trying to maintain control of Judea.

Back in the U.S., Obama, who has favored direct diplomatic engagement with Iran, condemned Bush for what he perceived as a political smear against him delivered on foreign soil.

"It is sad that President Bush would use a speech to the Knesset on the 60th anniversary of Israel's independence to launch a false political attack," Obama said.

"George Bush knows that I have never supported engagement with terrorists, and the president's extraordinary politicization of foreign policy and the politics of fear do nothing to secure the American people - or our stalwart ally Israel."

He said the U.S. needs "to do what Kennedy, Nixon and Reagan did and use all elements of American power - including tough, principled, and direct diplomacy - to pressure countries like Iran and Syria."

The White House denied Bush was singling out Obama for criticism, saying the president's remarks were addressed at all politicians who favor talks with radical regimes.

"I would think that all of you who cover these issues . . . have for a long time have known that there are many who have suggested these types of negotiations with people that President Bush thinks we should not talk to," said White House spokeswoman Dana Perino to reporters. "I understand when you're running for office you sometimes think the world revolves around you - that is not always true and it is not true in this case."

Senator John McCain, the presumptive Republican presidential nominee, said he agreed with Bush's characterization about the dangers of appeasement.

While McCain did not directly accuse Obama of appeasement, the Republican senator slammed the Democratic front-runner for proposing talks with Iranian president Mahmoud Ahmadinejad.

"I think that Barack Obama needs to explain why he wants to sit down and talk with a man who is the head of a government that is a state sponsor of terrorism, that is responsible for the killing of brave young Americans, that wants to wipe Israel off the map, who denies the Holocaust," McCain said in Columbus, Ohio.

"That's what I think Senator Obama ought to explain to the American people.''

While Bush and Olmert were sightseeing, Palestinians, who have often accused the U.S. of being too close to Israel to be an honest broker in Middle East peace talks, held marches and launched black balloons in the air over the West Bank to recall events of 60 years ago, which they recall as the Nakba or the Catastrophe.

Bush did not specifically mention the struggling Annapolis peace process, which he initiated last fall, but he did state that he believed the Palestinians would realize their dream of having a state.