US President George W Bush said today he was optimistic about ending the conflict between Israel and the Palestinians and declared 'now's the time to move the process forward.'

President Bush added, however, that the establishment of a Palestinian state would be key to any lasting Middle East peace.

'I'm realistic about how to achieve peace,' the president told a press conference. 'It starts with my understanding that there will never be peace until a true democratic state emerges in the
Palestinian territory.'

Earlier Israeli Prime Minister Ariel Sharon ruled out any Israeli participation in a Middle East conference expected to take place in London early in 2005.

'We will not participate, but we understand its importance,' Sharon told visiting Czech Foreign Minister Cyril Svoboda, according to an official statement.

British Prime Minister Tony Blair is widely reported to be
planning a major international conference in London early next year  to push the moribund peace process forward.