President Bush says that for the first time, the United States will provide direct aid to the Palestinian people through their own government. It is a show of support for Palestinian President Mahmoud Abbas.
President Bush made the announcement with Mr. Abbas at his side, fulfilling one of the main objectives of the Palestinian leader's trip to Washington.
Speaking to reporters in the White House Rose Garden, Mr. Bush praised Mahmoud Abbas for his commitment to democracy and reform, steps the White House considers vital for the creation of a viable, contiguous Palestinian state. He said a great achievement in history is now within reach, noting that Israel is moving forward with a plan to withdraw from the Gaza Strip.
"To help ensure that the Gaza disengagement is a success, the United States will provide to the Palestinian Authority $50 million to be used for new housing and infrastructure projects in Gaza," Mr. Bush said.
In the past, American aid to the Palestinians was funneled through non-governmental organizations. President Bush indicated the change was a sign of faith in Mr. Abbas.
"Mr. President, you have made a new start on a difficult journey, requiring courage and leadership each day. And we will take that journey together," Mr. Bush said.
President Abbas made clear that while the withdrawal from Gaza is welcome, it must not be seen as a substitute for a comprehensive peace plan. He called for efforts to revitalize the framework for negotiations known as the "Road Map."
Speaking through an interpreter, he warned that time is of the essence.
"Time is becoming our greatest enemy. We should end this conflict before it is too late," Mr. Abbas said.
Mr. Abbas spoke of his determination to maintain calm in the region, noting violence is now at its lowest level in four years. But he emphasized Palestinians remain very concerned about Israeli settlement activity in the West Bank, and the erection of an Israeli security barrier.
"These settlement activities, in addition to undermining President Bush's vision in establishing a Palestinian and contiguous state, that is a viable state that can live side-by-side with Israel, it also contributes to the feeling of frustration and despair," Mr. Abbas said.
President Bush said illegal Israeli outposts must be dismantled and settlement expansion must stop, noting they are not permitted under the Road Map. He also called for the Palestinian Authority to take more action to curb terrorist groups.
Mr. Bush was then asked about the presence of candidates from Hamas on the ballot for July 17 Palestinian elections. The president said the United States still sees the militant group as a terrorist organization, adding he does not believe it will get elected.
This is Mahmoud Abbas's first trip to Washington as president of the Palestinian Authority. President Bush refused to meet with his predecessor, Yasser Arafat, calling him "an obstacle to peace."