George W. Bush: 'I call upon the Palestinian people to elect new leaders not compromised by terror'

Extracts from the speech on the Middle East by President George Bush

Peace requires a new and different Palestinian leadership, so that a Palestinian state can be born. I call on the Palestinian people to elect new leaders, leaders not compromised by terror.

I call upon them to build a practising democracy based on tolerance and liberty ... And when the Palestinian people have new leaders, new institutions and new security arrangements with their neighbours, 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.

Today, Palestinian authorities are encouraging, not opposing terrorism. This is unacceptable. 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. If they energetically take the path of reform, the rewards can come quickly ... With a dedicated effort, this state could rise rapidly, as it comes to terms with Israel, Egypt and Jordan on practical issues such as security. The final borders, the capital and other aspects of this state's sovereignty will be negotiated between the parties as part of a final settlement.

Israel also has a large stake in the success of a democratic Palestine. Permanent occupation threatens Israel's identity and democracy. A stable, peaceful Palestinian state is necessary to achieve the security that Israel longs for.

So I challenge Israel to take concrete steps to support the emergence of a viable, credible Palestinian state. As we make progress toward security, Israeli forces need to withdraw fully to positions they held prior to 28 September 2000. And, consistent with the recommendations of the Mitchell committee, Israeli settlement activity in the occupied territories must stop.

Ultimately, Israelis and Palestinians must address the core issues that divide them if there is to be a real peace, resolving all claims and ending the conflict between them.

This means that the Israeli occupation that began in 1967 will be ended through a settlement negotiated between the parties, based on UN resolutions 242 and 338, with Israeli withdrawal to secure and recognised borders.