World reaction: 'Go on bleeding for now, then eventually we'll have two states'

Former Senate Majority Leader George Mitchell, who headed the commission that developed the peace plan: "There's a risk that someone from Hamas or Islamic Jihad could succeed Arafat, which would make it much, much worse."

UN Secretary-General Kofi Annan: "President Arafat was chosen freely by the Palestinian people in elections that were widely welcomed by the international community in 1996. He remains their leader and it will be up to them to decide through fresh elections already announced who will lead them in the future."

Hanan Ashrawi, Palestinian legislator: "Bush adopted the Israeli approach by putting preconditions on any type of movement in the peace process, and the preconditions are on the Palestinians only. Bush is presenting a vision without giving us a road map. Instead of taking up the Arab initiative and running with it, he didn't allude to it even obliquely. He based his position on the simplistic polarisation, either you are with us or you are against us. He didn't launch any effective process. He bought more time for Sharon and gave him the green light to continue with these very dangerous policies."

Egyptian President Hosni Mubarak: "The Palestinian Authority has supported this statement. If it has agreed upon it, then we support it, because it is balanced to a great extent... I do not see in this speech the removal of Arafat, but a demand for reforms of the Palestinian Authority and the formation of a new administration."

The Jordanian government: "We urge Israel to live up to this moment in history. Delay is a recipe for disaster."

Yossi Beilin, former Israeli justice minister and an architect of the 1993 Oslo peace accords: "The worst thing we can do is just to say we got a kosher stamp from the US President to do nothing. To do nothing means the continuation of the vicious circle of violence. Since there is no reference to an international conference, Bush is telling the parties to go on bleeding for now, then eventually we'll have two states."