President Bush says he looks forward to working with the newly elected Palestinian leader, Mahmoud Abbas. Mr. Bush says all sides now have to take steps to make the dream of a free, democratic Palestinian state a reality.

President Bush speaks of the Palestinian elections in hopeful terms. And in his comments, he makes clear that times are changing, and he is optimistic about the chances for peace under the leadership of Mahmoud Abbas.

"I look forward to talking with him at the appropriate time. I look forward to welcoming him here to Washington if he chooses to come here," Mr. Bush says.

That is an invitation Mr. Bush refused to extend to the late Yasser Arafat, whom he considered an obstacle to peace. He made clear he believes Mahmoud Abbas will choose a different course, and spoke of the job ahead.

During a brief question and answer session with reporters, the president stressed all sides need to take significant steps to move the peace process forward.

He said Israel understood the importance of Sunday's Palestinian election, and must take steps to help the Palestinians develop democratic institutions, and bolster the cause of reform.

"Israel can play and must play an important part in the development of a Palestinian state," Mr. Bush says. "At the same time, it is essential that the Palestinian leadership consolidates security forces so that they can fight off those few who still have the desire to destroy Israel as part of their philosophy and those few who fear there to be a free vote amongst the Palestinian people."

President Bush said the Palestinian election marks the beginning of an extraordinary year for those who believe in freedom and democracy. He noted that a few weeks from now, voters will also go to the polls in Iraq.

"Who could have possibly envisioned an election in Iraq at this point in history? And yet we are going to have an election," Mr. Bush says.

Earlier, White House Spokesman Scott McClellan was asked when Mr. Bush might place a congratulatory call to Mahmoud Abbas. Mr. McClellan said the White House was waiting for the official election results, and the call will be made once Mr. Abbas is formally declared the winner.