On Wednesday, Bush started an eight-day Middle East tour designed to build on goals set at the U.S.-sponsored Annapolis conference in November.
He said that Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas were committed to achieving peace, and that his visit to the region was aimed at helping both parties.
After meeting with Abbas, Bush said: "In order for there to be lasting peace, President Abbas and Prime Minister Olmert have to come together and make tough choices. And I'm convinced they will. And I believe it's possible - not only possible, I believe it's going to happen - that there be a signed peace treaty by the time I leave office (in January 2009). That's what I believe."
The president also commented that the Americans were "very much engaged" in peace negotiations. "I am confident that with proper help, the state of Palestine will emerge," he said.
Abbas said that the Palestinians were seeking a state with "[East] Jerusalem as its capital and an end to the refugee problem, in accordance with UN decisions."
"The Palestinian people, who are committed to peace, want to move freely in their country, with no roadblocks, [separation] fence or settlements," he said.
The Mideast conference in Annapolis produced a stated commitment by the Israeli and Palestinian leaders to resume peace talks after a seven-year hiatus. However, momentum was stalled by Palestinian demands that Israel drop plans to build 307 new homes in an area near Jerusalem.
"The question is whether or not hard issues can be resolved and the vision emerges, so that the choice is clear amongst the Palestinians," Bush said, going on to say that, "The choice being, `Do you want this state? Or do you want the status quo? Do you want a future based upon a democratic state? Or do you want the same old stuff?'"
Bush also said that the hard-line Islamic Hamas, which controls the Gaza Strip, had created nothing but misery for the inhabitants of the enclave, commenting that "Gaza's a tough situation," Bush said. "I don't know whether you can solve it in a year or not."
Bush's trip to the Palestinian territories does not include a stop in Gaza, seized by Hamas in June 2007 after bloody clashes with Abbas' Fatah movement.
After meeting Abbas, Bush went by helicopter to the West Bank city of Bethlehem.
