US: The following is an edited version of President Bush's speech.
"My vision is two states, living side by side, in peace and security. There is simply no way to achieve that peace until all parties fight terror. Yet at this critical moment, if all parties will break with the past and set out on a new path, we can overcome the darkness with the light of hope.
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. If the Palestinian people actively pursue these goals, America and the world will actively support their efforts. If the Palestinian people meet these goals, they will be able to reach agreement with Israel and Egypt and Jordan on security and other arrangements for independence.
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 in the Middle East.
In the work ahead, we all have responsibilities. The Palestinian people are gifted and capable and I'm confident they can achieve a new birth for their nation.
A Palestinian state will never be created by terror. It will be built through reform. And reform must be more than cosmetic change or a veiled attempt to preserve the status quo.
True reform will require entirely new political and economic institutions based on democracy, market economics and action against terrorism.
Today the elected Palestinian legislature has no authority and power is concentrated in the hands of an unaccountable few.
The Palestinian parliament should have the full authority of a legislative body. Local officials and government ministers need authority of their own and the independence to govern effectively.
The United States, along with the European Union and Arab states, will work with Palestinian leaders to create a new constitutional framework and a working democracy for the Palestinian people.
Today, the Palestinian people live in economic stagnation, made worse by official corruption.
The United States, the international donor community and the World Bank stand ready to work with Palestinians on a major project of economic reform and development.
The United States, the EU, the World Bank and the International Monetary Fund are willing to oversee reforms in Palestinian finances, encouraging transparency and independent auditing.
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." - (Reuters)