Abir Dandis, the mother of the two girls who were murdered in the Negev town of Al-Fura’a last week, couldn't find a police officer to listen to her warnings, neither in Arad nor in Ma’ale Adumim. Both police stations operate in areas where Israel wants to gather the Bedouin into permanent communities, against their will, in order to clear more land for Jewish communities. The dismissive treatment Dandis received shows how the Bedouin are considered simply to be lawbreakers by their very nature. But as a resident of the West Bank asking for help for her daughters, whose father was Israeli, Dandis faced the legal-bureaucratic maze created by the Oslo Accords.

The Palestinian police is not allowed to arrest Israeli civilians. It must hand suspects over to the Israel Police. The Palestinian police complain that in cases of Israelis suspected of committing crimes against Palestinian residents, the Israel Police tend not to investigate or prosecute them.

In addition, the town of Al-Azaria, where Dandis lives, is in Area B, under Palestinian civilian authority and Israeli security authority. According to the testimony of Palestinian residents, neither the IDF nor the Israel Police has any interest in internal Palestinian crime even though they have both the authority and the obligation to act in Area B.

The Palestinian police are limited in what it can do in Area B. Bringing in reinforcements or carrying weapons in emergency situations requires coordination with, and obtaining permission from, the IDF. If Dandis fears that the man who murdered her daughters is going to attack her as well, she has plenty of reason to fear that she will not receive appropriate, immediate police protection from either the Israelis or the Palestinians.

Dandis told Jack Khoury of Haaretz that the Ma’ale Adumim police referred her to the Palestinian Civil Affairs Coordination and Liaison Committee. Theoretically, this committee (which is subordinate to the Civil Affairs Ministry) is the logical place to go for such matters. Its parallel agency in Israel is the Civilian Liaison Committee (which is part of the Coordination and Liaison Administration - a part of the Civil Administration under the Coordinator of Government Activities in the Territories).

In their meetings, they are supposed to discuss matters such as settlers’ complaints about the high volume of the loudspeakers at mosques or Palestinians’ complaints about attacks by settlers. But the Palestinians see the Liaison Committee as a place to submit requests for permission to travel to Israel, and get the impression that its clerks do not have much power when faced with their Israeli counterparts. In any case, the coordination process is cumbersome and long.

The Palestinian police has a family welfare unit, and activists in Palestinian women’s organizations say that in recent years, its performance has improved. But, as stated, it has no authority over Israeli civilians and residents. Several non-governmental women’s groups also operate in the West Bank and in East Jerusalem, and women in similar situations approach them for help. The manager of one such organization told Haaretz that Dandis also fell victim to this confusing duplication of procedures and laws. Had Dandis approached her, she said, she would have referred her to Adalah, the Legal Center for Arab Minority Rights in Israel, which has expertise in navigating Israel’s laws and authorities.

John Kerry revealed his long-awaited plan for peace in the Middle East on Sunday, hinging on a $4bn (£2.6bn) investment in the Palestinian private sector.

The US secretary of state, speaking at the World Economic Forum on the Jordanian shores of the Dead Sea, told an audience including Israeli president Shimon Peres and Palestinian leader Mahmoud Abbas that an independent Palestinian economy is essential to achieving a sustainable peace.

Speaking under the conference banner "Breaking the Impasse", Kerry announced a plan that he promised would be "bigger, bolder and more ambitious" than anything since the Oslo accords, more than 20 years ago.

Tony Blair is to lead a group of private sector leaders in devising a plan to release the Palestinian economy from its dependence on international donors. The initial findings of Blair's taskforce, Kerry boasted, were "stunning", predicting a 50% increase in Palestinian GDP over three years, a cut of two-thirds in unemployment rates and almost double the Palestinian median wage. Currently, 40% of the Palestinian economy is supplied by donor aid.

Kerry assured Abbas that the economic plan was not a substitute for a political solution, which remains the US's "top priority".

Peres, who had taken the stage just minutes before, also issued a personal plea to his Palestinian counterpart to return to the negotiations.

"Let me say to my dear friend President Abbas," Peres said, "Should we really dance around the table? Lets sit together. You'll be surprised how much can be achieved in open, direct and organised meetings."

Thick locks hug the front gates of shuttered shops, now covered in graffiti and dust from lack of use. Only a handful of customers pass along the dimly lit road, sometimes stopping to check the ripeness of fruits and vegetables, or ordering meat in near-empty butcher shops.

“All the shops are closed. I’m the only one open. This used to be the best place,” said 64-year-old Mustafa Sunocret, selling vegetables out of a small storefront in the marketplace near his family’s home in the Muslim quarter of Jerusalem’s Old City.

Amidst the brightly coloured scarves, clothes and carpets, ceramic pottery and religious souvenirs filling the shops of Jerusalem’s historic Old City, Palestinian merchants are struggling to keep their businesses alive.

Faced with worsening health problems, Sunocret told IPS that he cannot work outside of the Old City, even as the cost of maintaining his shop, with high electricity, water and municipal tax bills to pay, weighs on him.

“I only have this shop,” he said. “There is no other work. I’m tired.”

Abed Ajloni, the owner of an antiques shop in the Old City, owes the Jerusalem municipality 250,000 Israeli shekels (68,300 U.S. dollars) in taxes. He told IPS that almost every day, the city’s tax collectors come into the Old City, accompanied by Israeli police and soldiers, to pressure people there to pay.

“It feels like they’re coming again to occupy the city, with the soldiers and police,” Ajloni, who has owned the same shop for 35 years, told IPS. “But where can I go? What can I do? All my life I was in this place.”

He added, “Does Jerusalem belong to us, or to someone else? Who’s responsible for Jerusalem? Who?”

Illegal annexation

Israel occupied East Jerusalem, including the Old City, in 1967. In July 1980, it passed a law stating that “Jerusalem, complete and united, is the capital of Israel”. But Israel’s annexation of East Jerusalem and subsequent application of Israeli laws over the entire city remain unrecognised by the international community.

Under international law, East Jerusalem is considered occupied territory – along with the West Bank, Gaza Strip and Syrian Golan Heights – and Palestinian residents of the city are protected under the Fourth Geneva Convention.

Jerusalem has historically been the economic, political and cultural centre of life for the entire Palestinian population. But after decades languishing under destructive Israeli policies meant to isolate the city from the rest of the Occupied Territories and a lack of municipal services and investment, East Jerusalem has slipped into a state of poverty and neglect.

“After some 45 years of occupation, Arab Jerusalemites suffer from political and cultural schizophrenia, simultaneously connected with and isolated from their two hinterlands: Ramallah and the West Bank to their east, West Jerusalem and Israel to the west,” the International Crisis Group recently wrote.

Israeli restrictions on planning and building, home demolitions, lack of investment in education and jobs, construction of an eight-foot-high separation barrier between and around Palestinian neighbourhoods and the creation of a permit system to enter Jerusalem have all contributed to the city’s isolation.

Formal Palestinian political groups have also been banned from the city, and between 2001-2009, Israel closed an estimated 26 organisations, including the former Palestinian Liberation Organisation headquarters in Jerusalem, the Orient House and the Jerusalem Chamber of Commerce.

Extreme poverty

Israel’s policies have also led to higher prices for basic goods and services and forced many Palestinian business owners to close shop and move to Ramallah or other Palestinian neighbourhoods on the other side of the wall. Many Palestinian Jerusalemites also prefer to do their shopping in the West Bank, or in West Jerusalem, where prices are lower.

While Palestinians constitute 39 percent of the city’s population today, almost 80 percent of East Jerusalem residents, including 85 percent of children, live below the poverty line.

“How could you develop [an] economy if you don’t control your resources? How could you develop [an] economy if you don’t have any control of your borders?” said Zakaria Odeh, director of the Civic Coalition for Palestinian Rights in Jerusalem, of “this kind of fragmentation, checkpoints, closure”.

“Without freedom of movement of goods and human beings, how could you develop an economy?” he asked.

“You can’t talk about independent economy in Jerusalem or the West Bank or in all of Palestine without a political solution. We don’t have a Palestinian economy; we have economic activities. That’s all we have,” Odeh told IPS.

Israel’s separation barrier alone, according to a new report by the United Nations Conference on Trade and Development (UNCTD), has caused a direct loss of over one billion dollars to Palestinians in Jerusalem, and continues to incur 200 million dollars per year in lost opportunities.

Israel’s severing and control over the Jerusalem-Jericho road – the historical trade route that connected Jerusalem to the rest of the West Bank and Middle East – has also contributed to the city’s economic downturn.

Separation of Jerusalem from West Bank

Before the First Intifada (Arabic for “uprising”) began in the late 1980s, East Jerusalem contributed approximately 14 to 15 percent of the gross domestic product (GDP) in the Occupied Palestinian territories (OPT). By 2000, that number had dropped to less than eight percent; in 2010, the East Jerusalem economy, compared to the rest of the OPT, was estimated at only seven percent.

“Economic separation resulted in the contraction in the relative size of the East Jerusalem economy, its detachment from the remaining OPT and the gradual redirection of East Jerusalem employment towards the Israeli labour market,” the U.N. report found.

Decades ago, Israel adopted a policy to maintain a so-called “demographic balance” in Jerusalem and attempt to limit Palestinian residents of the city to 26.5 percent or less of the total population.

To maintain this composition, Israel built numerous Jewish-Israeli settlements inside and in a ring around Jerusalem and changed the municipal boundaries to encompass Jewish neighbourhoods while excluding Palestinian ones.

It is now estimated that 90,000 Palestinians holding Jerusalem residency rights live on the other side of the separation barrier and must cross through Israeli checkpoints in order to reach Jerusalem for school, medical treatment, work, and other services.

“Israel is using all kinds of tools to push the Palestinians to leave; sometimes they are visible, and sometimes invisible tools,” explained Ziad al-Hammouri, director of the Jerusalem Centre for Social and Economic Rights (JCSER).

Al-Hammouri told IPS that at least 25 percent of the 1,000 Palestinian shops in the Old City were closed in recent years as a result of high municipal taxes and a lack of customers. “Taxation is an invisible tool…as dangerous as revoking ID cards and demolishing houses,” he said. “Israel will use this as pressure and as a tool in the future to confiscate these shops and properties.”

(CNN) -- Israeli airstrikes pounding Gaza are deepening the humanitarian crisis in an area that was already in deep distress, according to a United Nations aid official.

"The situation is absolutely disastrous," U.N. official Christopher Gunness told CNN on Sunday, as a second day of aerial attacks brought the death toll in Gaza close to 300. Hundreds more people have been injured.

Israel has said the airstrikes are a necessary self-defense measure after repeated rocket attacks from Gaza into southern Israel by Hamas militants. Israeli leaders say they are trying to minimize civilian casualties in Gaza.

Gaza is headed for "a major humanitarian disaster" unless the fighting ends soon, said Dr. Eyad El-Sarraj, a psychiatrist who runs Gaza's mental health program.

He described people huddling in their basements for safety as bombs fell.

"The children are terrified," he said. "Adults are unable to provide them with security or warmth. Hospitals are stretched out of the limits. We need blood and medicine and surgical equipment."

"People are suffering and dying because of shortages of medical equipment," said Dr. Mahmoud el-Khazndar, who works at Gaza City's Shifa Hospital. "The hospital is not accustomed to accept mass casualties like this."

Gunness, a spokesman for the U.N. Relief and Works Agency for Palestinian Refugees (UNRWA), said the agency has been unable to get needed medical supplies into Gaza for more than a year, because of Israel's blockade of border crossings.

"Long, long lists of drugs and other medical supplies which in the U.S. would be considered standard in any hospital -- they're just not available in Gaza," he said. "When people have been turning up for treatment following this massive attack, they are simply being turned away. If you've got things like shattered limbs, broken arms, broken legs, feet blown off, that kind of thing, you're simply not being seen. If you've got very light injuries and you need bandages or aspirins, you'll get seen."

The United Nations Security Council held a four-hour emergency meeting early Sunday on the situation, ending with a call for an immediate halt to violence. The council also called for a reopening of border crossings to allow humanitarian supplies to reach those in Gaza.

Israel did give in to requests from the Red Cross and others to allow 30 trucks loaded with fuel, food and medical supplies to pass into Gaza through the Kerem Shalom crossing Sunday morning, along with five ambulances contributed by Egypt, an Israeli security source said.

However, a senior Israeli military official said that the air raids will continue, and that Israeli ground troops deployed around Gaza will "be activated if needed."

The Red Cross and World Food Program trucks that moved across the border Sunday were the first deliveries allowed by Israel since 80 trucks moved through on Friday.

The Security Council also "called for all parties to address the serious humanitarian and economic needs in Gaza and to take necessary measures including opening all border crossings to ensure the continuous provision of humanitarian supplies, including the supplies of food, fuel and provision of medical treatment."

Gunness said Israel cooperates with his agency's efforts to get humanitarian supplies into Gaza -- but that's not enough.

"We have a good working relationship with Israelis on the ground," he said. "But at the political level, it seems that there is some kind of determination that there should be no development, there should be no prosperity inside Gaza."

Israeli Prime Minister Ehud Olmert told ministers at a weekly Cabinet meeting Sunday that the situation in southern Israel along the Gaza border "is liable to continue for some time, perhaps more than can be foreseen at the present time."

Gunness urged both sides to stop the violence and talk, saying the bombardment of Gaza doesn't serve Israel's strategic interests.

"To have tens of thousands, indeed hundreds of thousands, of angry, hungry, desperate people on the borders of Israel is not in Israel's interest," he said. "It's only the militants, it's only the extremists who benefit from the situation in Gaza."

Palestinian President Mahmoud Abbas urged the Hamas-led government on Thursday to accept the national goal of establishing a Palestinian state in Gaza and the West Bank alongside Israel.

He said time was short and told a conference of Palestinian leaders that he would call a referendum if there was no agreement between his Fatah Party and the ruling Hamas in 10 days.

Hamas, which has historically vowed to seek the destruction of Israel, won control of the Palestinian Authority from Abbas' Fatah movement in a surprise election win in January. The United States, the European Union and Israel consider Hamas a terrorist organization.

Abbas' dramatic move came in a week of deadly clashes between militants supporting Hamas and Fatah and the day after Israeli Prime Minister Ehud Olmert told the U.S. Congress that Israel would not wait "forever" for the Palestinians to agree to establishing borders.

Palestinian militants imprisoned in Israel, including members of Abbas' Fatah Party and a top Hamas leader, drew up the plan, which calls for areas captured by Israel in the 1967 Six-Day War to make up the Palestinian state.

"I will submit this document by the prisoners to a Palestinian referendum among all the people," Abbas said. "This is not a threat."

Speaking at the conference in Ramallah, West Bank, Abbas said the prisoners are united and have no factional interests that have internally divided Palestinian politicians.

"They [the prisoners] all discussed it together, and they came up with this product, which I think is a great product," Abbas said.

Abbas said the Palestinians have no time to waste with discussion, as the political and economic situation grows more difficult.

"In 10 days you have to decide; you have to agree," Abbas said. "If you don't agree, then I will say that frankly none of us will be responsible, and in 40 days I will call for a referendum. I will ask my people directly whether they accept or do not accept this document."

Earlier at Thursday's conference, Prime Minister Ismail Haniya called for national unity and a joint political platform between his Hamas party and Fatah, saying, "The best thing that we can work on is to remain united -- to work together."

"We are now passing through a very critical moment where all of us need to be behave very responsibly ... so that we can face all the challenges internally and externally," Haniya said.

Until its upset by Hamas in parliamentary elections, Fatah was the dominant force in Palestinian politics.

Destabilizing violence in the Palestinian territories increased this week as the Hamas-led government deployed its own militia against Abbas' orders. The action sparked a rivalry with existing Palestinian security forces and raised fears of a possible civil war.

In addition, a Gaza security chief loyal to Abbas was killed by a car bomb Wednesday, the third senior security official to be targeted in a week. Full story A spokesman for the Hamas-led Palestinian Authority told CNN that the government wants to "stop all kinds of clashes."

"We wanted to tell the world that our convictions and our struggle is with occupation, not with each other," Ghazi Hamad said, referring to the Israeli presence in the West Bank.

Hamad's Fatah counterpart, spokesman Ahmad Abdul-Rahman, agreed, saying the Palestinian factions must forge common ground.

"We can restore our unity," he said on CNN, but noted that Hamas must still accept previous peace agreements between Israel and the Palestinian Authority and recognize the Jewish state.

"We can achieve the support of the world. We can achieve the support of our people," Abdul-Rahman said.

"Now we are isolated because of this program of Hamas that was adopted while it was in opposition. Now when it is in the government, it is not working well."

Former president offers support for Senate immigration bill

ATLANTA, Georgia (CNN) -- President Jimmy Carter said Wednesday that he opposes the House's version of immigration legislation, and he encouraged Israel to negotiate directly with Palestinian Authority President Mahmoud Abbas.

CNN anchor Wolf Blitzer spoke with the former Democratic president, a frequent critic of Bush administration policies, at the end of a three-day human rights forum at The Carter Center in Atlanta.

BLITZER: You recently wrote in The Miami Herald this -- you said, "Competing legislation from the House of Representatives on immigration has strong racist overtones."

What specifically are you referring to?

CARTER: Well, it's such a punitive approach to the very sensitive issue of immigration. And I tried to point out in my editorial that these people who come to our country, and even the ones who employ them, are good, honest, hardworking, dedicated people.

And they don't need to be punished. And so I think whenever you single out a particular category of people for just punitive legislation, as I believe was done in the House version of the bill that might be passed, it does have overtones of distinguishing between a particular class of people.

BLITZER: So you're referring specifically to the House legislation, which would categorize these illegal immigrants as felons.

CARTER: That's correct, and also calls for the deportation of all of them. This and the categorization, as you just said, of everyone as a convicted criminal. This is not the proper approach [for] a nation that prides itself on being the champion of democracy, freedom and human rights.

BLITZER: The current president's plan calls for stronger border security, a guest-worker program and a path towards citizenship. It ... pretty much coincides with what senators [Edward] Kennedy and [John] McCain have in mind -- what the Senate certainly supports. But there is strong opposition in the House.

On this issue, I take it you don't have a lot of disagreement with President Bush.

CARTER: No, that's exactly right. I think that the approach that has been put forward and currently [is] being considered, the bill in the Senate, as supported, the way I understand it, by President Bush, is very compatible with ... my own views.

BLITZER: Should there have been legislation that makes English the official or national language of the U.S.?

CARTER: No, I don't think so. You know, we have gotten along for more than 200 years without excluding other languages.

This is a country that is kind of a melting pot for languages around the world. And I don't think there's any need for it.

It's just kind of one of those emotional issues that can turn one part of America against another. You know, we have survived OK without such language. And I think just to specifically say that it's the only language that we will accept officially is the wrong approach.

BLITZER: Let's talk a little bit about human rights in the West Bank, in Gaza, the Palestinian-Israeli problem, which is clearly very much on your agenda right now.

You say the elections were very free, very fair, the elections that saw Hamas win and become the leader of this new Palestinian government.

Listen to what ... Ehud Olmert, the [Israeli] prime minister, said this week at the White House about this new Hamas-led Palestinian government:

("The rise of Hamas, a terrorist organization, which refuses to recognize Israel's right to exist and regards terrorism as a legitimate tool, severely undermines the possibility of promoting a genuine peace process.")

Is the peace process effectively dead right now?

CARTER: Well, it depends on the judgment to be made by Israel and the Palestinians and with a heavy influence from Washington.

There is now a very clearly identified interlocutor or negotiator who represents the Palestinian community from two points of view. One is the president of the Palestine National Assembly, and that is Mahmoud Abbas. And the other point of view is a leader of the Palestinian Liberation Organization, the PLO. And that is the same person, Mahmoud Abbas.

And so he has been going around national capitals in Europe and other places during the last few months, strongly calling for direct talks between himself and representatives of the Israeli government. And there have been statements made even by Hamas leaders that they favor these direct talks between Abbas and representatives from Israel. So...

BLITZER: Mr. President, excuse me for interrupting. Olmert says that [Abbas] is powerless, he's helpless. He thinks he's a good man, but he ... has no longer the authority to deliver anything.

CARTER: Well, I don't want to get into a debate with the prime minister of Israel, whom I respect very much. But the fact is that there are only two positions that are distinct positions of authority.

One is the head of the Palestinian government, and the other is the head of the [Palestine] Liberation Organization. And the PLO is the only organization, as you know, that the government of Israel recognizes.

So Abbas can speak for the Palestinian community officially. He's also been the one in the past, as you know, that was endorsed by the United States government under President Bush and by the Israeli government under the former prime minister of Israel, [Ariel] Sharon.

So if there is a desire to have peace talks, obviously, the Palestinians have a representative who can speak for the Palestinian people.

BLITZER: Israel is saying, the government of Israel, that if there are no negotiations, Israel will take unilateral action to disengage, as he calls it, from the West Bank, at least from parts of the West Bank.

I know you've written an article suggesting that would be an illegal land grab, words to that effect... . I asked Olmert about your article on "Late Edition" last Sunday. Here's what he said about your comments. Listen to this:

("I have enormous respect for President Carter, who [comes] to visit me every now and then when he's in Israel. I think some of his statements are different than the ones he writes when he's far away.

"But I think that the basic point is this: Shall we negotiate with a terrorist government? I don't know that there is one serious American representative that will advise Israel to sit with a terrorist government and negotiate with them.")

Do you want to comment on that?

CARTER: I think I just have, Wolf. I'm not advocating that Prime Minister Olmert negotiate with the Hamas organization. I'm advocating they negotiate with Mahmoud Abbas, who is the president of the Palestinian organization, the government. And also the head of the PLO.

I haven't advocated that assistance of economic character be given through the Hamas government. What I've advocated is that humanitarian assistance only be given directly to the people in the West Bank and Gaza through the United Nations agencies, perhaps. Through the United Nations High Commissioner on Refugees, through UNICEF and other organizations -- bypassing the Hamas government.

So there's a difference between Hamas on the one hand, with whom Israel will not negotiate and which the United States cannot recognize, and the Palestinian people on the other. And their own chosen president and leader of the PLO, Mahmoud Abbas.

BLITZER: Mr. President, I want to leave it on a happy note. This week, you and your former vice president, Walter Mondale, became the longest living ex-president and ex-vice president in American history, beating [John] Adams and [Thomas] Jefferson. ...

CARTER: Thank you, Wolf. All you have to do is live a long life and choose a healthy vice president.

WASHINGTON -- President Bush met Wednesday at the White House with Israeli Prime Minister Ariel Sharon and praised Sharon's proposed withdrawal from Gaza and parts of the West Bank.

The Palestinians object to a provision in the plan, which would allow Israel to retain control of six blocs of Jewish settlements in the West Bank.

Following is a transcript of statements by Bush and Sharon after their meeting.

BUSH: I'm pleased to welcome Prime Minister Sharon back to the White House.

For more than 50 years, Israel has been a vital ally and a true friend of America. I've been proud to call the prime minister my friend. I really appreciate our discussions today.

The policy of the United States is to help bring peace to the Middle East and to bring hope to the people of that region.

On June 24, 2002, I laid out a vision to make this goal a reality. We then drafted the "road map" as the route to get us there.

The heart of this vision is the responsibility of all parties -- of Israel, of the Palestinian people, of the Arab states -- to fight terror, to embrace democracy and reform, and to take the necessary steps for peace.

Today, the prime minister told me of his decision to take such a step.

Israel plans to remove certain military installations and all settlements from Gaza and certain military installations and settlements from the West Bank.

These are historic and courageous actions. If all parties choose to embrace this moment, they can open the door to progress and put an end to one of the world's longest-running conflicts.

Success will require the active efforts of many nations. Two days ago I held important discussions with President [Hosni] Mubarak of Egypt, and I will soon meet with King Abdullah of Jordan. We're consulting closely with other key leaders in the region, in Europe and with our quartet partners: the E.U., Russia and the United Nations.

These steps can open the door to progress toward a peaceful, democratic, viable Palestinian state. Working together we can help build democratic Palestinian institution as well as strong capabilities dedicated to fighting terror so that the Palestinian people can meet their obligations under the road map on the path to peace.

This opportunity holds great promise for the Palestinian people to build a modern economy that will lift millions out of poverty, create the institutions and habits of liberty, and renounce the terror and violence that impede their aspirations and take a terrible toll on innocent life.

The Palestinian people must insist on change and on a leadership that is committed to reform and progress and peace.

We will help, but the most difficult work is theirs.

The United States is strongly committed and I am strongly committed to the security of Israel as a vibrant Jewish state. I reiterate our steadfast commitment to Israel's security and to preserving and strengthening Israel's self-defense capability, including its right to defend itself against terror.

The barrier being erected by Israel as a part of that security effort should, as your government has stated, be a security rather than political barrier. It should be temporary rather than permanent, and therefore not prejudice any final status issues, including final borders. And this route should take into account, consistent with security needs, its impact on Palestinians not engaged in terrorist activities.

In an exchange of letters today and in a statement I will release later today, I'm repeating to the prime minister my commitment to Israel's security.

The United States will not prejudice the outcome of final status negotiations and matters for the parties. But the realities on the ground and in the region have changed greatly over the last several decades, and any final settlement must take into account those realities and be agreeable to the parties.

The goal of two independent states has repeatedly been recognized in international resolutions and agreements, and it remains a key to resolving this conflict.

The United States is strongly committed to Israel's security and well-being as a Jewish state. It seems clear that an agreed, just, fair and realistic framework for a solution to the Palestinian refugee issue as part of any final status agreement will need to be found through the establishment of a Palestinian state and the settling of Palestinian refugees there rather than Israel.

As part of a final peace settlement, Israel must have secure and recognized borders which should emerge from negotiations between the parties in accordance with U.N. Security Council Resolutions 242 and 338.

In light of new realities on the ground, including already existing major Israeli population centers, it is unrealistic to expect that the outcome of final status negotiations will be a full and complete return to the armistice lines of 1949, and all previous efforts to negotiate a two-state solution have reached the same conclusion. It is realistic to expect that any final status agreement will only be achieved on the basis of mutually agreed changes that reflect these realities.

I commend Prime Minister Sharon for his bold and courageous decision to withdraw from Gaza and parts of the West Bank. I call on the Palestinians and their Arab neighbors to match that boldness and that courage. All of us must show the wisdom and the will to bring lasting peace to that region.

Mr. Prime Minister, welcome to the White House.

SHARON: Thank you.

I want to thank you, Mr. President, for your warm welcome and your strong support and friendship for the state of Israel.

I came to you from a peace-seeking country. Despite the repeated terror attacks against us, the people of Israel continue to wish for the achievement of a viable peace in accordance with our Jewish tradition, as outlined by Israel's prophets.

Our people desire to be known for its achievement in the fields of culture, science and technology, rather than in the battlefield.

We are committed to make any effort to develop our country and society for our own benefit and for the benefit of the peoples of the region.

In our meeting today, I presented to you the outlines of my disengagement plan. It will improve Israel's security and economy, and reduce friction and tension between Israelis and Palestinians.

My plan will create a new and better reality for the state of Israel. And it also has the potential to create the right conditions to resume negotiations between Israel and the Palestinians.

I was encouraged by your positive response and your support for my plan.

In that context, you handed me a letter that includes very important statement regarding Israel security and its well-being as a Jewish state. You have proven, Mr. President, your ongoing, deep, and sincere friendship for the state of Israel and to the Jewish people.

I believe that my plan can be an important contribution to advancing your vision, which is the only viable way to achieve peace and security in the Middle East.

I wish to end with a personal note. I, myself have been fighting terror for many years, and understand the threats and cost of terrorism. In all these years, I have never met a leader as committed as you are, Mr. President, to the struggle for freedom and the need to confront terrorism wherever it exists.

I want to express my appreciation to you for your courageous leadership in the war against global terror, and your commitment and vision to bring peace to the Middle East.

Thank you, Mr. President.

BUSH: Thank you, Mr. Prime Minister. Good job, good job.