Bush: Palestinian state 'part of a vision' if Israel respected

WASHINGTON (CNN) -- President Bush said Tuesday that a Palestinian state was always "part of a vision" if Israel's right to exist is respected. He said the two parties needed to get to work "on the Mitchell process" which he said provides a clear path to solving the crisis in the Middle East.

He refused, when asked, to say whether he had been prepared to announce his support for a Palestinian state prior to the Sept. 11 terrorist attacks on Washington and New York.

The president's statement at a meeting with congressional leaders, follows news that the administration is considering a series of high-profile steps related to the Israeli-Palestinian conflict to secure much-needed Arab support for the international coalition against terrorism.

State Department and other senior administration officials told CNN on Monday that drafts of a major policy speech on the Middle East, to be delivered by U.S. Secretary of State Colin Powell, are circulating in the State Department for review.

Officials said the speech will "clarify its [U.S.] views on an end result" of the peace process, which would lead to the eventual "creation of a Palestinian state."

VIDEO Officials hope the latest Mideast truce holds up while the U.S. works on forging a global anti-terrorist alliance. CNN's Jerrold Kessel reports (October 2) Play video (QuickTime, Real or Windows Media) President Bush spoke Tuesday morning about the economy, terrorism and the Middle East (October 2) Play video (QuickTime, Real or Windows Media)   MORE STORIES Arab leaders welcome U.S. Mideast moves

Powell had expected to deliver the speech last month on the sidelines of the U.N. General Assembly, but that plan was put on hold after the September 11 terrorist attacks on the World Trade Center and Pentagon.

Following the attacks, Powell's aides believed the speech needed some major revisions to reflect the current situation.

"It will go farther than we have ever gone," one official said. "There is an awful lot more that we view as being the end result than what we have said so far."

One point being hotly debated is whether to "call for ending all settlement activity," including so-called natural growth of existing settlements -- something previous U.S. administrations have come close to doing, but never done.

The official said such a speech would be a "powerful palliative" to the Arab world.

"It eases the pain," the official said. "It would end the perception we only move against Islam."

"We are getting hammered in the Arab world," this official said. "And it is not a mystery that one of the ways to diffuse this" is to see some movement on the Israeli-Palestinian conflict.

Administration sources acknowledged that Arab support on the international coalition is crucial to winning the U.S.-led war against terrorism to send a signal the war is not against Islam, but against Osama bin Laden and his terrorist network.

The administration also wants Arab states to cut the flow of money from wealthy Islamic supporters in their countries to bin Laden.

Officials are also debating whether the administration should invite Palestinian leader Yasser Arafat to Washington to meet with Bush or Powell. Although Arafat has met Powell outside of Washington, he has yet to meet Bush.

Some in the administration believe inviting the Palestinian leader to Washington could give Arafat the "empowerment" he needs to deal with extremist factions of his Palestinian forces.

"Arafat needs a visit," one official said, noting that Arafat has publicly condemned terrorism and called for a cease-fire.

CNN Washington Bureau's Andrea Koppel and Elise Labott contributed to this report