Speaking after talks at the White House, Mr Bush announced that on Monday the UN Security Council will discuss the creation of a multinational force to patrol a buffer zone on the southern Lebanon border. Mr Bush said the US would be tabling a UN Security Council resolution next week to seek an end to hostilities "as soon as possible" but it failed to meet the demands for a ceasefire in an open letter in The Independent yesterday, signed by 42 leading figures in the arts, business and politics.
Heightening fears that the war in Lebanon is being used as a proxy war between the US and Iran, Mr Blair said Iran would be mistaken if it thought the war was an opportunity to step up its pursuit of a nuclear weapon. " They risk increasing confrontation," he said.
Cabinet ministers warned that Mr Blair's refusal to stand up to Mr Bush would hasten his own exit from power. "This whole episode is very damaging for Tony," said one cabinet source. "They can cobble together a resolution but it won't be a solution to the violence. Tony thinks there is an arc of Islamic extremists like the Fascists in the Second World War. But this war is acting as a recruitment sergeant for the extremists." The source was dismissive about Mr Blair's attempts to influence the President. "The only special relationship the US has is with Israel. This is all driven by internal US politics. I don't know why Tony hasn't told Bush we have internal political pressures too."
Both Mr Bush and Mr Blair refused to discuss a ceasefire. Mr Blair was expected to claim their talks were a breakthrough but their commitment to a peace plan was in danger of being dismissed by their critics as window dressing and hot air last night.
Mr Bush offered the prospect of reconstruction of the ravaged areas of Lebanon to rehouse the thousands of refugees. But their plans failed to live up to the Downing Street spin operation in advance of their meeting at the White House which suggested there could be a call for a ceasefire next week.
Mr Blair said the war was a "complete tragedy" but said it offered an "opportunity" to force Hizbollah to abandon its campaign against Israel. He said he wanted to see "a cessation of hostilities as quickly as possible" but he refused to condemn Israel for the indiscriminate bombing. He said: "The conditions have got to be in place for it to happen. This can only work if Hizbollah are prepared to allow it to work." He claimed the violence was "part of a bigger picture" in the Middle East of reactionary groups trying to stop progress towards democracy. "There should be no doubt at all that it will be a temporary respite unless we put in place the longer-term framework, " he said.
Mr Bush described the conflict as "the calling of the 21st century" . The resolution would set out the framework for a "cessation of hostilities on an urgent basis" and the deployment of the mutlinational force, he said. "Our goal is to achieve a lasting peace that requires the free democratic and independent Lebanese government be in power to exercise full authority over its territory."
Opening their joint press conference, Mr Bush made a joking reference to his overheard remarks to the Prime Minister at the G8 conference when a microphone was left on and he said: "Yo Blair." "You share with me your perspective and you let me know when the microphone is on ..."
Mr Blair's aides outlined a proposed agreement that would see a UN stabilisation force police a buffer zone within Lebanon's southern border. The UN would also call for the withdrawal of Iranian and Syrian personnel, and the "progressive disarmament" of Hizbollah if the draft resolution is agreed.
But Andrew Murray, chairman of the Stop the War Coalition, said: "It is simply hot air. Despite the previous spin we have heard in recent days, their position is exactly the same; they are still endorsing continuing Israeli aggression against Lebanon. There is a huge amount of anger around the country about that."
Mr Blair's spokesman was dismissive of calls for a ceasefire without an agreement on a new force as "just so much wind". Instead, said the spokesman, Mr Blair wants to step up the pace of diplomatic efforts. " We want to increase the pace of diplomacy in identifying the steps necessary to bring about a ceasefire on both sides," he said. "I believe what we should be working towards is a resolution as early as possible next week. We believe others are roughly in the same ballpark."
The British-backed draft resolution is designed to enable the Lebanese government to fulfil UN resolution 1559 that calls for the removal of all militias from its border with Israel, he said. "It would give a mandate to a new, UN-backed multinational force." Downing Street does not rule out the possibility that a Nato force could be deployed, so long as it has UN blessing.
A French suggestion that the security zone should straddle the border with Israel was rejected. In return for the withdrawal of Hizbollah from Lebanon and its sponsors, the UN would commit to a renewed attempt to secure the two-state road map to peace. It was clear, however, that many questions about the composition, size, mandate and timing of deployments are unresolved.
Downing Street again made clear it was unlikely that any peacekeeping force including US or British troops would be deployed, leaving Mr Blair to urge more speedy action from the sidelines.
The Labour MP Phyllis Starkey a former Foreign Office aide said Mr Blair had a "far too rosy view" of the Israeli tactics. "I believe that the Prime Minister does not take a strong enough line with them in telling them when they are going against international law," she said.
Blair apologises for Preswick flight
By Ben Russell
* Tony Blair was offered a "one line" apology from President Bush over the United States' use of a British airport as a transit for weapons shipments to Israel.
The Prime Minister's official spokesman said President Bush had limited his apology to the US failure to observe the proper procedures for using Prestwick airport near Glasgow as a stopover for an Israel-bound plane carrying laser-guided bombs.
"It was just a one line. As part of the introduction, the President said sorry there was a problem," the spokesman said.
Sir Menzies Campbell, the Liberal Democrat leader, said Britain should " say no" to any transfers, after it emerged this week that the US asked for permission for more flights to stop in Britain over the coming weeks. The Foreign Office said permission would be granted if the US observed correct procedures.
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