UNITED NATIONS (AFP) - President George W. Bush dealt Israel a rare, sharp US rebuke, calling for a freeze on settlements in occupied territories and an end to the "daily humiliation" of the Palestinian people.
Taking centre stage at the annual debate at the United Nations, Bush also called on the Palestinian leaders and Arab states to renounce ties to terrorist groups and implicitly urged world leaders to cut all ties to Yasser Arafat.
Accused by critics of staying aloof from the peace process and leaning too far towards Israel, Bush reiterated his familiar calls for Palestinian reforms and complaints against their current leadership.
"Peace will not be achieved by Palestinian rulers who intimidate opposition, tolerate corruption and maintain ties to terrorist groups," he said. "The long suffering Palestinian people deserve better."
Without naming Arafat, who he has tried to exclude from the peace process for two years, Bush said, "world leaders should withdraw all favour and support from any Palestinian ruler who fails his people and betrays their cause."
He had an additional word for Arab states, saying they "should end excitement in their own media, cut off private and public funding for terrorism and establish normal relations with Israel."
But he also put a heavy load on Israel, the United States` traditional ally, to help move forward lagging efforts to implement a US-backed road map aimed at ending four years of violence and creating a Palestinian state.
"Israel should impose a settlement freeze, dismantle unauthorised outposts, end the daily humiliation of the Palestinian people and avoid any actions that prejudice final negotiations," Bush said.
"Even after the setbacks and frustrations of recent months, good will and hard effort can achieve the promise of the roadmap to peace," he said.
Those who would lead a new Palestinian state should adopt peaceful means to achieve the rights of their people, and create the reformed institutions of a stable democracy."
Bush framed his remarks within an overall appeal for the spread of democracy within the Middle East along the lines of US-backed governments in Afghanistan and Iraq, which he said should serve as a model.
"For too long many nations, including my own, tolerated even excused oppression in the Middle East in the name of stability," Bush said.
"The oppression became common but stability never arrived. We must take a different approach," he said, adding that the "democratic hopes we see growing in the Middle East are growing everywhere."