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SLUG: 2-289541 Bush-Mideast (L)









INTRO: President Bush and Israeli Prime Minister Ariel Sharon have failed to agree on whether Mideast peace talks should lead to the creation of a Palestinian state. VOA's Scott Stearns reports, their White House meeting Tuesday was overshadowed by another bomb attack in Israel.

TEXT: The two leaders were already meeting in the Oval Office when they received word that there had been an "incident" in Israel. By the end of their talks, it was clear there had been another bombing, and Mr. Bush expressed his condolences to the Prime Minister.

Mr. Sharon then decided to return home, canceling talks with Congressional leaders and a trip to New York.

Neither man spoke publicly about the latest attack. White House officials say Mr. Sharon spent most of the meeting laying-out his plans to move the process forward including a ministerial-level peace conference and a reform of Palestinian institutions.

Mr. Bush says he is sending C-I-A Director George Tenet back to the region to help reconstruct Palestinian security forces under what the president calls a "unified" command that will be "transparent and held accountable."

But while the men may be closer on what to do next in the Middle East, they are still split over where the process is headed. Mr. Bush again declared his support for an eventual Palestinian state. Mr. Sharon says it is too soon to talk about.

/// SHARON ACT ///

I think that it is still premature to discuss this issue. I think that what we have to concentrate now is to make every effort that real reform will take place.

/// END ACT ///

The Prime Minister's position presents a problem for the Bush Administration since it has signed-on to a Saudi peace plan that has Israel returning land it occupied in the 1967 war in return for Arab recognition of Israel's right to exist.

White House officials say reforming the existing Palestinian Authority is one way to ease Israeli concerns about an eventual Palestinian state. President Bush says he will push ahead with those reforms despite his disappointment with Palestinian leader Yasser Arafat.

/// BUSH ACT ///

I think he has had an opportunity to lead to peace and he hasn't done so. That's why it is important for all of us to work out a way to develop the institutions necessary for there to be a Palestinian authority that's got the capacity to keep security as well as a Palestinian Authority that's got the ability to help promote hope for the future of her people that there's an education system that works, a health system that is vibrant.

/// END ACT ///

Prime Minister Sharon says Israeli military operations in Palestinian areas have created the opportunity to move ahead with Palestinian reforms.

/// SHARON ACT ///

I believe that there is a chance now to start and to move forward. We discussed these issues, how to move forward. We emphasized about the need for reforms in the Palestinian authority.

/// END ACT ///

White House officials say they are not trying to choose Palestinian leadership. It is Palestinians who will benefit from better government, they say, so it must be Palestinians who lead these reforms.(SIGNED)


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