Blair on Wednesday said that strife-torn Iraq can yet be salvaged -- but as part of a wider Middle East strategy centered on the peace process.

"We have to pursue what I call a policy for the whole Middle East, and that means in particular and starting with finding a solution to the Israel-Palestinian conflict, which I think is absolutely essential if we are to put that region on a stable footing."

That chimed with a key Iraq Study Group finding that the United States cannot achieve its goals in the Middle East unless it deals directly with the Arab-Israeli conflict and regional instability.

But asked whether Bush shared the view that the two conflicts were closely linked, White House spokesman Tony Snow replied: "I don't know."

"The commission thinks that there clearly is a link here, and that to the extent that you get resolution on the Palestinian-Israeli issue, that can only be helpful. The president believes that," he told reporters.

The meeting follows US mid-term elections in which Bush's Republican Party lost control of Congress, and comes after the departure of Defense Secretary Donald Rumsfeld and UN Ambassador John Bolton -- both Iraq war hawks.

It also came one week after a peculiar dispute inside the State Department triggered when a senior analyst said he was "ashamed" of the way Bush treated Blair and that US-British relations were "totally one-sided" in Washington's favor.

The Times of London quoted Kendall Myers, a foreign research analyst in the department's Bureau of Intelligence and Research, as saying that Britain's self-appointed role as a bridge between America and Europe was "disappearing before our eyes."

"We typically ignore them and take no notice. ... It's a sad business," Myers was quoted as saying, adding that he felt a "little ashamed" of Bush's treatment of Blair, according to the paper.

The US State Department flatly repudiated the statement, and Blair on Wednesday rejected charges that he had subjugated Britain's foreign policy to Washington's, saying: "We've got to decide this policy based on the British national interest."

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