President Bush has proposed an international conference on reviving the Middle East peace process to include Israel, the Palestinian Authority, and some Arab states.
In an address in Washington on Monday, Mr. Bush said Palestinians face a choice between the path of moderate President Mahmoud Abbas or the path of extremist militant group Hamas. He said siding with Hamas would crush the possibility of a Palestinian state.
In phone calls to leaders of Saudi Arabia, Jordan and Egypt, the president urged them to continue to support President Abbas and Prime Minister Salam Fayyad.
Mr. Bush also pledged to increase aid to Mr. Abbas's government based in the West Bank, and called on Israel to remove unauthorized Jewish outposts in Palestinian territory and to end settlement expansion.
Both Israel and the Palestinian Authority welcomed Mr. Bush's call for a conference, which the president said would take place later this year and would be headed by Secretary of State Condoleezza Rice.
The United States and Israel are seeking to bolster Mr. Abbas and his government following Hamas's violent take-over of the Gaza Strip last month.
Earlier Monday in a meeting in Jerusalem, Israeli Prime Minister Ehud Olmert told Mr. Abbas that Israel will free 250 Palestinian prisoners Friday.
A spokeswoman for Mr. Olmert says the prime minister made a commitment to release the prisoners and improve the quality of life for Palestinians. Palestinian negotiator Saeb Erekat said Mr. Abbas expressed concern about the humanitarian situation in the Gaza Strip, and called on Israel not to hinder aid shipments to the territory.