George W Bush on Thursday cautioned Israel not to undermine the authorities and security forces of a fledgling Palestinian state, as he sought to reassure Palestinian leaders that the US will act as an even-handed mediator in the Arab-Israeli peace talks launched last year.

On the second day of his most extensive Middle East trip as US president, Mr Bush told Mahmoud Abbas, the president of the Palestinian Authority: ”To the extent that Israeli actions have undermined the effectiveness of the Palestinian force, or the authority of the state relative to the average citizen, is something that we don’t agree with, and have made our position clear.”

The Israeli armed forces make frequent incursions into the West Bank to arrest suspected militants, arguing that the forces loyal to Mr Abbas have neither the ability nor the readiness to fight terrorism. But Palestinian leaders say such moves make it impossible to build up their own forces to take on the militants.

Mr Bush also acknowledged Palestinian frustrations with the tight net of Israeli checkpoints in the West Bank, which make it hard for Palestinian to travel even within the territory itself: ”Checkpoints create frustrations for people. They create a sense of security for Israelis. They create massive frustration for the Palestinians.”

He added. ”The whole object is to create a state that is capable of defending itself internally and giving confidence to its neighbour that checkpoints won’t be needed.”

The US president said he was confident the two sides could meet their goal of striking a comprehensive peace agreement before the end of the year. Mr Bush added he stood ready to ”nudge” the two sides when necessary, but expressed faith in the ability of Mr Abbas and Ehud Olmert, the Israeli prime minister, to settle their differences in bilateral talks.

Mr Bush and Mr Abbas also discussed the situation in the Gaza Strip, which is no longer controlled by the Palestinian Authority president after Hamas, the Islamist group, ousted his Fatah party there last June. The split between the two territories, and the frequent rocket attacks on Israeli cities by Gaza-based militants, is shaping up to be a crucial obstacle to the peace talks.

Asked how Mr Abbas could stop the rocket attacks from Gaza, Mr Bush said: ”It can’t be solved unless the president has a vision which he lays out to the people of Gaza. There is a competing vision taking place in Gaza.”