Bush calls for Mideast Peace Conference

US President George W. Bush called Monday for an international conference to revive Middle East peace talks and warned Palestinians that backing Hamas would "crush" their hopes for their own state.

Later, Bush telephoned beleaguered Palestinian president Mahmud Abbas to reaffirm his support and called leaders of Saudi Arabia, Jordan, and Egypt to seek their backing for the initiative, said spokesman Gordon Johndroe.

"Now comes a moment of choice. The alternatives before the Palestinian people are stark," Bush said in a speech at the White House aimed at bolstering Abbas and undercutting Hamas, which Washington brands a terrorist group.

Bush warned that support for Hamas, which seized Gaza from Abbas backers on June 15, would be a victory for the militant group's "foreign sponsors" in Syria and Iran and "would crush the possibility of a Palestinian state."

The US president said Israel and the Palestinians and their Arab neighbors can do more to help revive Middle East peace prospects and called for an international conference within months.

"The world can do more to build the conditions for peace," he said, adding that US Secretary of State Condoleezza Rice will chair the gathering and that attendance will be limited to states that back the creation of a Palestinian state, reject violence, and recognize Israel.

The plan won instant backing from Israel and Abbas, but swift condemnation from Hamas, with spokesman Ismail Radwan telling AFP: "We condemn this American conference which aims to serve the interests of the Zionist enemy."

"The conference will lead to increased pressure on Mahmud Abbas and separate the Gaza Strip more deeply from the West Bank while sowing division among Palestinians," Radwan added.

Bush also urged Arab nations to end "the fiction that Israel does not exist," curb anti-Israel rhetoric in their media and send cabinet-level officials to the Jewish state.

And Bush pushed Israeli Prime Minister Ehud Olmert to continue to release Palestinian tax revenue to Palestinian prime minister Salam Fayyad; halt Israeli settlement expansion and dismantle unauthorized outposts.

Israelis "should be confident that the United States will never abandon its commitment to the security of Israel as a Jewish state and homeland for Jewish people," said the embattled US president.

Bush also hailed talks earlier in the day between Olmert and Abbas, as a senior Israeli official said the prime minister had pledged to free 250 Palestinian prisoners in a goodwill gesture to the Palestinian leader.

But while welcoming the release, the Palestinians said the freeing of 250 prisoners out of the more than 11,000 currently held in Israeli jails was not enough.

Bush also announced a direct US contribution of 80 million dollars to help Abbas reform his security services. Two US officials said the money was being shifted from Gaza to Fayyad's government.

More US aid will come when former British prime minister Tony Blair, now the envoy for the Middle East "quartet" of the United States, United Nations, European Union, and Russia, reports success in building a plan for bolstering Palestinian security and political institutions.

"With the proper foundation, we can soon begin serious negotiations toward the creation of a Palestinian state," said Bush.

But "we're not going to announce a dollar amount for a plan that has yet to be elaborated or announced," a senior US official said on condition of anonymity.

The members of the diplomatic quartet are to meet in the Portuguese capital Lisbon on Thursday to take stock after Abbas appointed a new government following the abrupt takeover of Gaza by Hamas.

It is to be the first meeting between the quartet's chief diplomats, including Rice, and Blair, who was named to the envoy post shortly after stepping down as British leader on June 27.

EU foreign policy chief Javier Solana will travel to Israel and the Palestinian territories Wednesday to prepare for the meeting, his spokeswoman said Monday.

Solana will meet Tuesday with Blair in Brussels before flying out to the region, where he is scheduled to hold talks with officials in Jerusalem and Ramallah, said spokeswoman Cristina Gallach.

Solana is due to meet Abbas and Fayyad, ahead of talks with Olmert and Israeli Foreign Minister Tzipi Livni.