The White House has urged the Palestinians and Israel to follow US President George W Bush's Middle East peace vision and said he was "very worried" about Israel's survival absent a Palestinian state.
"The president believes very strongly that if the parties want to find a way out of the violence, they need to heed his call," Bush spokesman Ari Fleischer told reporters traveling with the president to a G8 summit in Canada.
"The president believes his speech represents the best long-term hope for Israel. He is very worried about the future viability of Israel unless a Palestinian state is created," Fleischer said.
Fleischer also sought to downplay the reach of demands Bush made of the Palestinians while withholding criticism of Israel's retaliatory moves following Palestinian suicide bombings and other anti-Israeli attacks.
"The president is not asking the Palestinian Authority anything more or less than he has asked of any other nation in the world," said the spokesman.
Mr Yasser Arafat has dismissed US President George W Bush's call for a new Palestinian leadership, saying it was up to Palestinians to decide the matter in elections.
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An Israeli soldier on guard under a poster of Palestinian President Yasser Arafat in Ramallah
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The Palestinian leader was speaking after Mr Bush made clear in a speech yesterday he had written off Mr Arafat as part of any peace settlement, saying Palestinians must pick leaders "not compromised by terror" to achieve a state alongside Israel.
Asked for a response to Mr Bush's call for a new leadership, Mr Arafat told reporters: "This is what my people will decide. They are the only ones who can determine this."
Mr Arafat, under international and internal pressure to reform the Palestinian Authority, said elections were necessary but he had not announced a date for them. "We will respect all the principles the Palestinian people support."
He denied that Mr Bush's remarks were directed against him. "He spoke about a Palestinian state and elections, and we consider our state will be democratic with the coming elections..."
Palestinian officials gave the speech a mostly chilly reception despite Mr Bush's commitment to the eventual creation of a Palestinian state.
Mr Arafat was speaking in his Ramallah complex, surrounded by tanks after Israel reoccupied the West Bank city and Bethlehem, Jenin, Nablus, Tulkarm and Qalqilya following Palestinian suicide bombings that killed 26 Israelis in Jerusalem last week.
Israeli Prime Minister Mr Ariel Sharon has vowed that Israeli forces will hold on to Palestinian-ruled areas until attacks on Israelis cease.
Endorsed by the announcement of the US Middle East policy, Mr Sharon today reiterated his demand for a change in the Palestinian leadership.
"(Mr Sharon) has said on numerous occasions that when there is a complete cessation of terror, violence and incitement, and when the Palestinian Authority enacts genuine reforms, including new leadership at the top, such that a different Authority is created, then it will be possible to discuss how to make progress on the political tracks," a statement from his office said.