US backs 'eventual' Palestinian state, Bush confirms

President George Bush confirmed yesterday that his Administration, is now willing to support for the first time publicly, the eventual establishment of a Palestinian state.

Speaking to journalists in the White House, Mr Bush confirmed the substance of media reports that the National Security Council agreed before September 11th that the Secretary of State, Mr Colin Powell, would use his General Assembly speech this year to back eventual statehood. Media reports say the Administration is now considering how to revive what it sees as an important initiative. However, the State Department later denied that such a speech was planned.

But Mr Bush said that statehood was "always part of the vision so long as the right of Israel to exist is respected", but "first things first", he said, arguing that the Israelis and Palestinians must first return to the peace process and the recommendations of the Mitchell report.

The Administration's involvement in the Middle East peace process has acquired added significance since September 11th and diplomats believe that a forceful contribution by the President to the debate could help cement the alliance with moderate Arab states against Islamic fundamentalism. State Department sources have told journalists that there has been pressure from allies, particularly the Saudis, Egypt, Jordan and the UAE, to do so before the US and allies get involved in military strikes.

A speech by the President or Mr Powell would cover such issues as a general Administration view of "final" issues like borders, the status of Jerusalem, and the "right of return" of refugees, although on the latter issue he is unlikely to make Arab partners very happy. President Clinton in a speech before he left office in January said that Israel could not be expected to support a right of return which Israelis fear could lead to a massive and unsustainable influx of hundreds of thousands of Palestinian exiles.

Mr Clinton said, however, that there could be no resolution without a "sovereign and viable Palestinian state" and argued for an undivided Jerusalem that would serve as capital of both Israel and Palestine.

The NSC is also believed to have agreed that Mr Bush would meet the Palestinian leader, Mr Yasser Arafat, probably also during the now-curtailed General Assembly meeting. A US initiative is also seen by key US figures like the former head of the CIA, Mr George Tenet, as an incentive to Mr Arafat to curb militants in his own community. Mr Tenet has been heavily involved in co-ordinating talks between the Israelis and Palestinians on security issues.

There is also the possibility that the Administration may revive the practise of having a special representative to the Middle East who could help to push both sides back into talks.