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Bush Calls for End to Israeli Occupation, Criticizes Arafat

President Bush says he sees progress in the Middle East, but stresses all parties must do more. Mr. Bush says, now that Palestinian leader Yasser Arafat has been released from confinement, he must take action against terrorism.

"In recent days, we are beginning to see some signs of progress," he said. "The situation in Ramallah has been resolved non-violently. We are working for peace in Bethlehem. I am encouraged by my meeting with [Saudi] Crown Prince Abdullah and the steps he has taken to advance his vision of peace."

Mr. Bush spoke after talks at the White House with leaders of the European Union. He said Europe and the United States share a common goal in the Middle East, a vision of Israel and a Palestinian state living side-by-side in peace. "A Palestinian state must be achieved by negotiating an end to occupation," he said. "But such a state cannot be based on a foundation of terror or corruption."

The president seemed to be choosing his words very carefully. He put pressure on Israel by using the term "occupation." But there was also a strong message for Yasser Arafat. Mr. Bush said, now that the Israeli siege of Mr. Arafat's headquarters in Ramallah is over and the Palestinian leader is free to travel, he must act. "I think it is very important for Chairman Arafat to show the world that he is capable of leading," said President Bush.

Earlier, the president's spokesman was asked about remarks made by Yasser Arafat after Israeli troops left the area around his Ramallah compound. Mr. Arafat called the Israelis "terrorists, Nazis and racists." His words brought a mild reprimand from Ari Fleischer. "The president believes that now is the time for all parties in the region to ask themselves what they can do to bring peace to the region and not to speak ill of others," he said.

The White House is getting ready for another round of talks next week with regional leaders. Jordan's King Abdullah will meet with the president on Wednesday, and Israeli Prime Minister Ariel Sharon will consult with President Bush at a day and time still to be announced. Mr. Fleischer indicated there are no plans to invite Yasser Arafat, now that he is free to travel, saying Mr. Arafat must first earn the president's trust.