"Michele Kelemen on 'All Things Considered'"

MICHELE NORRIS, Host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.

ROBERT SIEGEL, Host:

And I'm Robert Siegel.

President Bush says he believes Israelis and Palestinians will come to a peace agreement before he leaves office. On the second day of his Mideast trip, Mr. Bush said that now is the time for leaders in the region to make difficult choices, to make that happen. He called for an end to the Israeli occupation of Palestinian territories with some adjustments to borders to reflect reality is on the ground.

And NPR's Michele Kelemen reports the president saw some of those realities as he toured the West Bank today.

MICHELE KELEMEN: President Bush told Palestinians today he understands their frustrations about Israeli checkpoints and he got a firsthand view of that, well, sort of.

GEORGE W: You'd be happy to here that my motorcade of a mere 45 cars was able to make it through without being stopped. I'm not so exactly sure that's what happens to the average - in an average person.

KELEMEN: A heavy morning fog meant that he had to travel by road to the West Bank city of Ramallah rather than by helicopter. So he passed Israeli checkpoints, Israeli settlements and one of those unauthorized outpost that he says have to go as Israelis and Palestinians begin to negotiate the contours of a Palestinian state. Mr. Bush said he's facing a tight timeline just 12 months.

BUSH: And I believe it's possible, not only possible. I believe it's going to happen if there'll be a signed peace treaty by the time I leave office.

KELEMEN: Though there is much skepticism in the region, Palestinian President Mahmoud Abbas was also sounding hopeful. He spoke through an interpreter.

MAHMOUD ABBAS: (Through translator) Good. His state visit today to the Palestinian territories is highly appreciated by our people. And it's a new expression of your deep commitment towards establishing peace on the land of peace.

KELEMEN: President Bush had little interaction with Palestinian people, though. Ramallah was a ghost town today with only Palestinian security forces on the street, the same was true in Bethlehem where the president took in some of the sights and sounds from a Muslim call to prayer to bells of the Church of the Nativity. The president lit a candle in the grotto where Jesus Christ was believed to have been born. The president called it one of the holiest sites for Christians. And he thanked Palestinians for enduring the presidential trip which meant tighter security in a town already walled off by the Israeli security barrier.

BUSH: Someday, I hope that as a result of a formation of a Palestinian state there won't be walls and checkpoints, that people will be able to move freely in a democratic state.

KELEMEN: After a short helicopter ride back to his hotel in Jerusalem, the president recorded a message spelling out more precisely some of the tough choices both sides will have to make and send in a clear signal to Israel.

BUSH: There should be an end to the occupation that began in 1967. The agreement must establish the Palestine as a homeland for the Palestinian people just as Israel is a homeland for the Jewish people.

KELEMEN: He suggested a compensation fund for Palestinian refugees and talked about the need for Israel to have secure, recognized and defensible borders, and a state of Palestine that is viable and contiguous. Mr. Bush named an Air Force general, William Fraser to monitor how the Israelis and Palestinians are doing in carrying out confidence-building measures. And his aides say the president might return to the region this year to continue nudging the process forward.

Left unanswered in all of these is how to deal with Gaza - a Palestinian territory now controlled by Hamas, which rejects peace talks and refuses to recognize Israel. Israeli Prime Minister Ehud Olmert said there could be no peace without Gaza being part of the package. Mr. Bush today called it a tough problem but offered no solutions.

Michele Kelemen, NPR News, Jerusalem.