U.S. President George Bush warned Iran Wednesday against further attempts to intimidate American warships in the Persian Gulf, in the midst of a mission to foster peace in the region and help create a Palestinian state.

"It was a dangerous gesture on their part," Bush said of the incident, which was captured on video and released by the Pentagon. "And they know our position, and that is: There will be serious consequences if they attack our ships, pure and simple. And my advice to them is don't do it."

Bush's visit to the Mideast has been greeted with skepticism over what he can achieve, according to analysts, but he said Israeli and Palestinian leaders are ready to make the difficult choices necessary for peace.

"If you are asking me if I am nudging them forward, well my trip was a pretty significant nudge," Bush told a news conference Wednesday in Jerusalem, one held with Israeli Prime Minister Ehud Olmert.

Bush is on the first visit to Israel of his presidency. Olmert described him as the "most important friend of Israel."

The trip follows the November conference in Annapolis, Md., at which both the Israelis and Palestinians agreed to launch the first major peace talks in seven years.

After arriving in Tel Aviv, an optimistic Bush said there was "a new opportunity for peace here in the Holy Land and for freedom across the region."

Israeli President Shimon Peres, who greeted Bush along with Olmert, called the next 12 months "a moment of truth" that "must not yield just words."

But CTV's Middle East Bureau Chief Janis Mackey Frayer said Wednesday that there is a great deal of skepticism among people in the region about what Bush can actually help.

With less than a year left in office, Bush is attempting now to tackle a conflict that has defied world leaders, negotiators and diplomats for decades, said Frayer.

She said the Israeli and Palestinian negotiating teams have already hit snags since the Annapolis conference because of ongoing violence and disputes related to Jewish settlements.

"The sense that George Bush is going to be able to muster anything -- even the definition of a Palestinian state, as he says, by the end of 2008 -- really is quite optimistic in the opinion of most."

Bush reaffirmed the close ties between Israel and the U.S. on his arrival.

"The alliance between our two nations helps guarantee Israel's security as a Jewish state," he said.

The reference to Israel as a Jewish state has special significance since the Palestinians are opposed to the term -- saying it blocks the right of Palestinian refugees to return to lost properties within Israel.

Prior to Bush's arrival, both sides pledged to have negotiators work on the so-called final status issues, which include:

  • The final borders between Israel and a future Palestine;
  • Completing claims to the holy city of Jerusalem; and
  • The fate of millions of Palestinian refugees and Israeli security concerns.

Bush said he had no illusions about the difficulty of the task ahead, adding he can't control the outcome. "America cannot dictate the terms of what a state will look like," he said. "We'll help."

Bush said illegal Israeli outposts on Palestinian land "must go" and that he would be speaking with Palestinian Authority President Mahmoud Abbas about how rocket fire by Palestinian militants can best be suppressed.

Olmert said there could be no peace until attacks against Israel were controlled "everywhere," including the Gaza Strip where the Islamist group Hamas controls the territory, not the more moderate Palestinian Authority.

Bush will later visit the Palestinian-governed West Bank, along with Kuwait, Bahrain, United Arab Emirates, Saudi Arabia and Egypt.

Just prior to Bush's arrival, Palestinian militants in the Gaza Strip blasted southern Israel with rocket and mortar fire. Israeli police said 12 projectiles were fired. 

Iran

Bush defended continuing pressure on Iran over its nuclear ambitions.

While Iran may have suspended a nuclear weapons program in 2003 ,according to a recently released U.S. National Intelligence Estimate, it could easily be restarted, he said.

Iran's claim it is enriching uranium for civilian purposes could lead to doing so for a nuclear bomb, he said.

"You better take the Iranian threat seriously," Bush said.

The question for Iran is whether it wants to pay the price of world isolation in exchange for continuing its enrichment program, he said.

Bush said he remains committed to a diplomatic solution with Iran.

He also warned Iran of "serious consequences" if the Persian nation attacked any U.S. warships.

The U.S. said Iranian boats acted aggressively near three U.S. Navy ships on the weekend. Iran has denied the allegation and said U.S. video and audio of the incident was "fabricated."
 
With files from The Associated Press