Hamas left in cold as Bush backs Abbas to find peace blueprint

President George Bush has called an international Middle East conference in his clearest effort yet to bolster the emergency government set up by the Palestinian President, Mah-moud Abbas, at the expense of Hamas.

Mr Bush depicted the conference, to be chaired by the US Secretary of State, Condoleezza Rice, as part of a process which he insisted could " ultimately" lead to a final settlement of the Middle East conflict if Palestinians opted for "rejecting violence".

The idea is to provide Mr Abbas and his new Prime Minister, Salam Fayaad, with the "political horizon" they have been calling for to reinforce the authority of the new West Bank-based government over that of Hamas, which now controls Gaza after savage fighting last month.

Last night, Mr Bush said the takeover of Gaza by Hamas had shown the movement's "devotion to terrorism and murder". He also sought to reinforce the international isolation of Hamas by making clear his approval of Mr Abbas's expulsion from government of the Hamas Prime Minister Ismail Haniyeh by saying that the Palestinian people now had a choice between a "future of decency and hope" over a "future of terrorism and death".

Mr Bush, who stressed the role to be played by Tony Blair as the envoy of the international quartet, said the conference would include Israel, the emergency Palestinian government and Israel's Arab "neighbours". He praised Mr Fayaad and Mr Abbas and said the US wanted to "strengthen the forces of moderation" among Palestinians.

He pledged $80m (£40m) to boost the Fatah security services as part of a $190m funding package for the new emergency government, which he said would include emergency humanitarian aid to Gaza.

Mr Bush called on Israel to play its part by dismantling "unauthorised" settlement outposts, which are illegal even under Israeli law, and to freeze expansion of settlements in the West Bank. But he also made clear that he was sticking to the moribund, internationally agreed "road map" by insisting that "terrorist" militias would have to be dismantled before any lasting settlement.

Mr Bush did not give details on how the conference would advance talks on a final settlement and he repeated the demands that Hamas recognise Israel, renounce violence, and abide by existing agreements if it was to have any chance of achieving international acceptance.

He also failed to spell out which if any Arab countries apart from Egypt and Jordan, which already recognise Israel, would be invited to the conference though he was careful to mention the recent Arab League decision to endorse a Saudi Arabian initiative that recognises Israel in return for a peace deal based on 1967 borders.

Israel indicated yesterday that it was prepared for "moderate" Arab states that had not yet formally recognised Israel to attend the conference. Mark Regev, the Foreign Ministry spokes-man, identified Saudi Arabia, Morocco, Tunisia and other Gulf States.

Mr Bush's intervention in a White House address came after a meeting in Jerusalem between Mr Abbas and the Israeli Prime Minister, Ehud Olmert, at which Mr Olmert agreed to implement his promise to release 250 mainly Fatah prisoners on Friday.

The move followed an agreement by Israel to cease hunt and arrest operations against 180 Fatah militants in the West Bank and to release to the Abbas-Fayaad government $100m of $600m in customs duties owed to the Palestinian Authority withheld since the election of Hamas in 2006.

At the same time Israel has allowed in a significant shipment of weapons through Jordan to help Fatah security services.

Mr Regev said last night that Israel welcomed President Bush's announcement and added that the way to achieve a two-state solution was to "engage with Palestinian moderates and have a zero-tolerance policy on terrorism".