US President George W Bush has said he believes the Palestinians will have their own state after signing a peace deal with Israel before he leaves office next year.

At a news conference with Palestinian President Mahmoud Abbas in the West Bank city of Ramallah, Mr Bush said: "I believe it's going to happen, that there will be a signed peace treaty by the time I leave office."

"I am confident that with proper help the state of Palestine will emerge."

Mr Bush said he would provide both political and economic backing but said Mr Abbas and Israeli Prime Minister Ehud Olmert must "come together to make hard choices".

Speaking at Muqata, the late Palestinian leader Yasser Arafat's compound, Mr Abbas hailed Mr Bush as the first US President to commit fully to back a Palestinian state.

Critics of Mr Bush say he did little during the first seven years of his presidency to end the 60-year-old conflict and doubt that the many differences can now be overcome.

They accuse him of trying to burnish his legacy in the Middle East after five years of war in Iraq.

A politically weak Mr Abbas is hoping Mr Bush's visit to Ramallah will boost his own standing among Palestinians who are desperate for progress towards an end to Israeli occupation and fulfilment of their dream of an independent state.

Mr Bush held talks with Olmert in Jerusalem on Wednesday, saying he was "very hopeful" about prospects for peace.

But Mr Bush acknowledged: "I'm under no illusions. This is going to be hard work."

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