Bush said the conference would include only "nations that support a two-state solution, reject violence, recognize Israel's right to exist, and commit to all previous agreements between the parties."

The administration did not indicate where the conference would be held.

In addition to Egypt and Jordan, which do have formal relations with Israel, it seemed possible that Saudi Arabia, Kuwait, the United Arab Emirates and Yemen might attend. Bigger question marks were Iraq, Syria and Lebanon.

"We wouldn't be launching ourselves on this enterprise if we didn't feel some confidence that there is a willingness in the region to embrace the path to peace," said Assistant Secretary of State David Welch, the State Department's top diplomat for the Middle East. "We believe that this is a moment for everybody to push the go button and try and make this work."

Bush called on Israel to remove unauthorized outposts in Palestinian territory and end settlement expansion. And he urged Israel to continue releasing tax revenues to the Palestinian authority.

At the same time, the Palestinian government "must arrest terrorists, dismantle their infrastructure and confiscate illegal weapons," Bush said. "They must work to stop attacks on Israel, and to free the Israeli soldier held hostage by extremists. "

Bush said that in terms of creation of a Palestinian state, there is "a level of consensus never before seen on this crucial issue."

Separately, Bush called King Abdullah of Saudi Arabia, King Abdullah II of Jordan and Egyptian President Hosni Mubarak on Monday afternoon, said White House spokesman Gordon Johndroe.

The president urged them to "continue to provide full support" to efforts by Abbas and Fayyad in working with Israeli Prime Minister Ehud Olmert "to make progress toward the realization of the vision of two states, Israel and Palestine, living side by side in peace and security," Johndroe said.

Bush also called Abbas to discuss his Middle East speech and to "reiterate his support," Johndroe said.

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