By Matt Spetalnick and Tabassum Zakaria
SHARM EL-SHEIKH, Egypt (Reuters) - U.S. President George W.Bush, responding to Arab dismay about his praise for Israel,said on Saturday he was confident a deal on Palestinianstatehood could be reached before he leaves office.
Despite scepticism over his chances of securing a peaceagreement by the end of his term in January, Bush expressedoptimism that a deal could be done.
Speaking after a meeting with Palestinian President MahmoudAbbas in the Red Sea resort of Sharm el-Sheikh, Bush said hetold Abbas that he was "absolutely committed" to working withPalestinians and Israelis to get a Palestinian state defined.
"I do so for a couple of reasons. One, it breaks my heartto see the vast potential of the Palestinian people reallywasted," he said.
"It'd be an opportunity to end the suffering that takesplace in the Palestinian territories," Bush said. "And thesecond reason I'm for it is because it's the only way forlasting peace."
Palestinians say the Israeli occupation in the West Bankhas created great hardship for them.
Abbas did not mention Bush's speech to Israel's parliamenton Thursday in which he heaped praise on Israel but made onlyone reference to Palestinians' aspirations for a state of theirown.
"We know very well that you personally as well as youradministration are committed to reach peace before the end of2008," Abbas said. "We are delighted to continue our engagementwith you."
Bush, who will address Palestinian issues in a speechSunday to the World Economic Forum, said the creation of aPalestinian state would be "an opportunity to end the sufferingin the Palestinian territories."
ANNIVERSARY VISIT
Egyptian President Hosni Mubarak had raised the issue ofBush's speech to the Knesset in a meeting earlier on Saturday.
"We detect on the American side some optimism and we toldthem that we have the same information but it is results thatwill reveal whether this progress which the parties speak of isreal," Egyptian Foreign Minister Ahmed Aboul Gheit toldreporters.
"Time will tell how able the U.S. administration is toachieve its objectives but we must keep trying. We cannot leavethe Palestinians in this tragic situation which we see in Gaza,or the West Bank," he said.
On the way from the airport on the last leg of his MiddleEast tour, Bush's motorcade passed a "peacemakers" mural on theside of the road, a reminder of past efforts on diplomacy inthe region by his predecessors.
Bush's visit to Israel to celebrate its 60th anniversaryraised fresh doubts in the Arab world over his ability to actas an even-handed broker between Israel and the Palestinians.
He hailed Israel as a "homeland for the chosen people" andpledged that Israelis could forever count on American supportagainst enemies like Hamas and Iran.
Abbas, who wants Bush to put more pressure on Israel, haslittle leverage and is weak at home, governing only in the WestBank while the Islamists of Hamas control Gaza.
Israeli Prme Minister Ehud Olmert is also on the ropes,facing a corruption scandal that could force his resignationand possibly derail the peace process altogether.
Bush's Middle East tour, his second this year, follows aU.S.-hosted conference in Annapolis, Maryland, in Novemberwhere Israeli and Palestinian leaders pledged to try to reach apeace agreement by the end of Bush's term.
Since then, talks have bogged down over Israeli settlementexpansion in the occupied West Bank and violence in and aroundthe Gaza Strip, where Hamas cross-border rocket fire hastriggered a tough Israeli military response.
(Additional reporting by Jonathan Wright; Editing by KeithWeir)
