Bush's long-awaited policy speech heralds a worsening in Arab-American relations, reports Mohamed El-Sayed Said from Washington Click to view caption US President George W Bush is well-versed in Israeli Prime Minister Ariel Sharon's political lexicon, as was demonstrated by his lashing out at the Palestinian leadership, his demands for its ouster and outlining of conditions to be met by Arab and Muslim states. Yet the substance of his vision for the final resolution of the Palestinian-Israeli conflict was greeted by Palestinian officials as being workably close to their own. They highlighted Bush's insistence that he was committed to building a provisional Palestinian state, and that a final settlement be based on UN Resolutions 242 and 338. That he regarded territories gained by Israel in 1967 as occupied, and demanded an end to occupation and a negotiated solution to the questions of Jerusalem, refugees and other aspects of Palestinian state sovereignty, was also stressed. The US president's desire to see certain moves on Israel's part during the provisional stage, including withdrawal to pre-September 2000 positions, an end to the siege and blockade imposed on the Palestinian people, and a halt to settlement activities in the occupied territories, as recommended in the Mitchell Report, was also welcomed. But the language of the speech fell like a rock on the heads of international observers. The US president was expected to lash out at Palestinian President Yasser Arafat: he far exceeded expectations when he demanded a "new and different Palestinian leadership so that a Palestinian state can be born". Another surprising feature of Bush's statement were the demands placed on Arab countries. Paraphrasing a motion presented to Congress by AIPAC, he challenged Syria to "choose the right side in the war on terror by closing terrorist camps and expelling terrorist organisations". In a clear reference to Saudi Arabia, he asked "every nation to stop the flow of money to Hamas, Islamic Jihad and Hizbullah". And in an equally clear reference to Egypt, he demanded that "every leader actually committed to peace end incitement to violence in official media and publicly denounce homicide bombing". Bush placed two additional demands on Arab states. The first is to "build closer ties of diplomacy and commerce with Israel"; the second, to "oppose regimes that promote terror, like Iraq". That Bush's interventionism and arrogance in addressing Palestinian and Arab concerns will further complicate American-Arab relations already strained by the administration's pro-Israel bias, is a concern raised by many commentators. The speech is also expected to fuel anti-American sentiments in the Arab and Muslim world. And despite a display of flexibility, the implied references to a number of Arab leaders will not pass unnoticed. Almost as soon as the speech was over another surprise followed. WAFA, the Palestinian press agency, announced Arafat's positive assessment. Within minutes Nabil Shaath, Palestinian minister of planning, also declared that he viewed the speech, in essence, positively. He said it had unleashed a process that could have positive results. Shaath emphasised that his understanding was that Bush had called for comprehensive reforms, not for the removal of the present leadership. Such reactions suggest the Palestinian leadership will attempt to circumvent Bush's demand for a "new and different leadership" by interpreting it as a call for elected and accountable representatives chosen in fair, internationally supervised elections. President Mubarak adopted the same interpretation of Bush's speech, saying the US president asked for "a new Palestinian administration" and not necessarily Arafat's removal. A majority of observers of the American scene, though, agree that Bush's statement made the realisation of a provisional Palestinian state conditional on the removal of the present Palestinian leadership, an interpretation underlined unanimously by the US media. While the Jewish lobby is ecstatic, several Arab- American organisations reacted to the speech with anger and frustration. The Arab-American Institute lamented that the "community is gravely disappointed... the president has set US foreign policy and US-Arab relations back with today's announcement". The long-awaited Bush statement appears to open the door to two alternatives. The first is to try to reach some sort of compromise on Arafat's status: many regional and international actors will be willing to try to convince the Americans of the wisdom of the Palestinian and Arab interpretation of Bush's demand for reformed leadership. The main argument will be that Arafat's role is essential to any Palestinian peace and nation building strategy. If such attempts fail, the second alternative will be that the American administration strengthens its alliance with Sharon's government, possibly permitting a lasting reoccupation of Palestinian territories. One possible exit from the political and diplomatic impasse might be to establish a parliamentary system in Palestine in which power rests with a cabinet, headed by a prime minister, with the president assuming symbolic functions. Arafat, in this case, will become a constitutional head of state. Arafat might also contemplate departing to some Arab capital from where he might revive the PLO and assume a general supervisory power over Palestinian negotiators and political functionaries. Whatever the immediate interpretations, the prospects for any negotiated settlement within the parametres set by President Bush are extremely low. Few Palestinians, few Arabs, find they have any reason to trust his administration's promises. They know that he has no desire to face down Sharon. Bush's demands are made exclusively on Palestinians and Arabs.