Bush plays down G8 differences over Arafat

US President George W

US President George W. Bush has played down resistance to his call for the removal of Palestinian President Yasser Arafat and said European leaders had responded well to his strategy for ending the Israeli-Palestinian conflict.

"The response has been positive and for that I'm grateful," Mr Bush said during a meeting with Russian President Vladimir Putin on the sidelines of a summit of Group of Eight nations.

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If I were President Arafat I would make a grand gesture that would enable him to go down forever in history as the man who gave everything for the freedom of his country
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Italian Prime Minister Silvio Berlusconi

"The reason why is most European leaders understand something has to change in order for there to be peace, and that starts with free elections, a new constitution, transparency, rule of law amongst the Palestinians. And that's the hopeful way to get to where we need to get, which is two states living side-by-side in peace," he added.

The plan initially received a cautious welcome in Europe, but Italian Prime Minister Silvio Berlusconi backed Mr Bush today and said Mr Arafat should stand down.

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"Many people are convinced that Arafat, a winner of the Nobel peace prize, should make a generous gesture and move aside," Mr Berlusconi said. "If I were President Arafat I would make a grand gesture that would enable him to go down forever in history as the man who gave everything for the freedom of his country."

German Chancellor Gerhard Schroeder agreed that the G8 leaders had few quibbles with Mr Bush after he spoke. "There was not much criticism on that speech," Mr Schroeder said in a television interview.

Mr Bush stepped up pressure on the Palestinians to remove Mr Arafat after receiving Israeli intelligence alleging the Palestinian leader authorized a $20,000 payment to Al-Aqsa Martyrs Brigades, which claimed responsibility for a suicide bombing in Israel that killed six people and wounded 35.

Yesterday, Mr Bush threatened to withhold financial aid unless the Palestinians embraced reform and severed ties to terrorism.