US-MIDDLE EAST: President Bush has reiterated that it is the responsibility of both sides in the Middle East to engage in the peace process. However, his comments yesterday about the Palestinian leader, Mr Yasser Arafat were again pointed. He regretted Mr Arafat's past inability to act decisively and spoke of the need for the creation of a Palestinian state that was not based "on terrorism or corruption".
Mr Bush was speaking to journalists in the White House after the annual EU-US summit. Representing the EU were the Spanish Prime Minister, Mr José Maria Aznar, and the President of the Commission, Mr Romano Prodi.
Although the talks appear to have been dominated by the Middle East, a number of trade disputes were also on the agenda. Mr Bush hinted for the first time that the US was now prepared to fulfil its obligations under the World Trade Organisation regarding the controversial Foreign Sales Corporations. The WTO has twice found against the US on the FSCs - the means by which US exporters are given billions in special tax breaks.
Mr Bush said it would take some time, however, to legislate - understood as a hint that he may not press the necessary legislation until after November's crucial congressional elections.
However, if one dispute appears to be easing, there was no progress on US measures against steel imports and Mr Prodi expressed himself "worried" by the direction taken by the US in its Farm Bill.
The bill, agreed finally by both Houses this week, adds 70 per cent to US farm subsidies and appears to fly in the face of US obligations agreed at Doha to launch a new world trade round.
Mr Prodi said he was concerned that the bill would make access to US agricultural markets by the developing countries more difficult and moves in the opposite direction to the reforms being undertaken in the EU.
Following the meeting, representatives of the EU, US, Russia and the UN met again to review progress, or the lack of it, in the Middle East. Mr Prodi insisted that a peace process without both the EU and US was not viable. The EU, he said, had contributed to stabilising the situation on the ground and would be providing humanitarian relief.