The Bush Administration Tuesday begins the work of convincing Palestinians and Israelis to join the president's new plan for Mideast peace. The plan calls for action from all sides in the conflict, but depends most heavily on sweeping reforms from the Palestinians.

President Bush says Secretary of State Colin Powell will work with regional leaders to build support for the plan which is built around the creation of a provisional Palestinian state.

Announcing his plan Monday afternoon, President Bush said that state will only come through reform of the Palestinian Authority, not through terror. "When the Palestinian people have new leaders, new institutions and new security arrangements with their neighbors, the United States of America will support the creation of a Palestinian state whose borders and certain aspects of its sovereignty will be provisional until resolved as part of a final settlement in the Middle East."

The president is calling for a new constitutional framework for Palestinians to create an independent legislature and judiciary. He wants multi-party elections for new local leaders by the end of the year with national elections to follow shortly after.

White House officials say the administration is not trying to tell Palestinians who to choose as their leaders, only that they must choose new leaders who the president says are not "compromised by terrorism." "Today, Palestinian authorities are encouraging, not opposing terrorism. This is unacceptable," he said. "And the United States will not support the establishment of a Palestinian state until its leaders engage in a sustained fight against the terrorists and dismantle their infrastructure."

While officials say this is an issue of institution building, not individuals, the plan is clearly a vote of no-confidence in the leadership of Yasser Arafat.

In the week that this speech was delayed by another wave of violence, a senior administration official says President Bush became more and more resolute that something has to change in the Middle East.

The official says Mr. Bush has been disappointed time and time again by Palestinian leaders who he feels are not doing enough to fight terror. Asked if the United States would still back a provisional state if Yasser Arafat is elected leader, the administration official said, "It would be very hard to get there."

President Bush tried to temper his criticism of Palestinian leaders by saying the plan is meant to address the hopes of the Palestinian people as well as Israeli security. "The world is prepared to help, yet ultimately these steps toward statehood depend on the Palestinian people and their leaders," he said. "If they energetically take the path of reform, the rewards can come quickly."

If Palestinians embrace democracy, confront corruption and reject terror, Mr. Bush says they can count on American support for a provisional state within three years.

Once those reforms start to take shape, the president says he expects Israel to do its part by withdrawing from Palestinian areas and stopping settlement in occupied territories.

That leaves some of the most difficult issues, including the status of Jerusalem and the borders of a separate state, to be negotiated between Israel and the interim Palestinian leadership.