In a Washington address Thursday, Secretary of State Colin Powell launched a new Bush administration initiative aimed at promoting greater political and economic freedom in the Arab world. U.S. officials hope that greater opportunity in the region will mean less political extremism.

The money committed to the administration's Middle East Partnership Initiative is modest, only $29 million for the first year. But the goals are ambitious: promoting democratization, free market reforms and womens' rights in a region where authoritarian rule and closed economies have stifled growth and personal initiative.

Unveiling the program at Washington's Heritage Foundation, Mr. Powell said the United States would not try to impose its values in the region. But he also rejected the idea that the Middle East is somehow a region where democracy is not appropriate.

"We reject the condescending notion that freedom will not grow in the Middle East, or that there is any region of the world that cannot support democracy," said Mr. Powell. "President Bush gave voice to the yearnings of people everywhere when he declared, in his West Point address, that when it comes to the common rights and needs of men and women, there is no clash of civilizations. The requirements of freedom apply fully to Africa, and Latin America and the entire Islamic world. Given a choice between tyranny and freedom, people choose freedom."

Mr. Powell cited statistics showing Arab economic output trailing far behind European countries, and said too many economies in the region are burdened by cronyism, over-regulation and a lack of transparency.

He also criticized education systems that focus on learning-by-rote and stifle creativity. And he also suggested that Middle Eastern societies will continue to lag behind those of the rest of the world until they unleash the full potential of their women.

"There is a constant theme running through these challenges, and that is the marginalization of women," emphasized Mr. Powell. "More than half of the Arab world's women are illiterate. They suffer more than men from unemployment and lack of economic opportunity. Women are make up a smaller proportion of members of parliament in Arab countries than in any other region of the world. Until the countries of the Middle East unleash the abilities and potential of their women, they will not build a future of hope."

The secretary said the United States has no rigid formula for political and economic change and that it would work with individual countries to fashion their own representative system.

The initiative, the start of which was delayed several times by regional crises, is aimed in part at countering critics who have said the United States has turned a blind eye to undemocratic practices by its Middle East allies.

Mr. Powell said the administration would ask for more money for the program next year, and that funding would be in addition to the more than $1 billion in economic aid the United States provides annually to Arab countries.

He said the push for freer societies will go hand-in-hand with continued U-S efforts for a solution to the Israeli-Palestinian conflict.

Next week, Mr. Powell will host a conference with U.N. Secretary-General Kofi Annan, Russian Foreign Minister Igor Ivanov and senior European Union officials on the stalled peace process.

The four parties the so-called Middle East "Quartet" are fine-tuning what they call a "roadmap" for a final peace accord including Palestinian statehood by 2005.