JERUSALEM, (Reuters) – U.S. President George W. Bush arrived in the Middle East on Wednesday to celebrate Israel’s 60th birthday and try to energise peace efforts complicated by a corruption scandal that could topple Prime Minister Ehud Olmert.

Bush, who faces deep doubt he can secure a deal between Israel and the Palestinians before leaving office in January, planned to meet Israeli leaders and address parliament during his three-day stay. “Our two nations both faced great challenges when they were founded and our two nations have both relied on the same principles to help us succeed. We built strong democracies to protect the freedoms given to us by an almighty God,” Bush said at a red-carpet ceremony at Tel Aviv’s Ben-Gurion airport. He and his wife Laura were welcomed by a smiling Olmert and his wife, Aliza, and Israeli President Shimon Peres. “Welcome to the new Israel, 3,000 years old and going on 60,” Peres said, citing biblical roots and praising Bush for standing “by our side in sunny mornings and stormy weather”.

Olmert, fighting for his political survival in the face of a police investigation into suspected bribe-taking, said on Tuesday that he and Palestinian President Mahmoud Abbas had reached understandings and points of agreement on some issues. But Palestinian officials were sceptical, and one noted that the two sides still had a long way to go.

With the clock ticking on his administration, Bush, on his second visit to Israel this year, is trying to salvage a foreign policy legacy encompassing more than the unpopular war in Iraq. He holds talks with Olmert later in the day widely expected to include discussion of Iran’s nuclear programme, which Israel views as a threat to its existence. Tehran says it wants nuclear technology only for electricity.

In remarks coinciding with Bush’s Middle East visit, Iranian President Mahmoud Ahmadinejad said Israel was “dying” and that people in the region would destroy it, given the chance.

Bush also will be mindful of another crisis brewing in Lebanon, where a power struggle between the pro-Western government in Beirut and Iranian-backed Hezbollah could deal a further blow to U.S. efforts to stabilise the Middle East.

In the Hamas-controlled Gaza Strip, Mahmoud al-Zahar, a leader of the Islamist group opposed to the U.S. peace efforts, said: “There is no welcome for Bush in the Holy Land. There is no welcome for hypocrite presidents who are defiling our land.”

Bush, who flew on to Jerusalem from Tel Aviv by helicopter, will not visit the Palestinian territories but planned to meet Abbas in Egypt on Saturday.

Palestinians are marking their “Nakba”, or “catastrophe” this week. The Nakba refers to the 700,000 Palestinians who fled or were expelled from their homes in 1948.

Olmert and Abbas agreed at a U.S.-hosted conference in November to try to reach a peace deal, including an agreement on Palestinian statehood, this year.

Since then, talks have faltered over Israeli settlement expansion plans in the occupied West Bank and violence in and around the Gaza Strip. Egyptian mediators hope to halt that violence in U.S.-backed talks on a truce between Israel and Hamas.

Speaking to reporters en route to the Middle East, U.S. national security adviser Stephen Hadley said Bush was still confident an Israeli-Palestinian deal could be reached before he leaves office in January. “It’s obviously hard . … There’s limited time left, but I think we believe the parties are making progress,” Hadley said.

In the latest setback, Olmert faces calls to resign over claims he took bribes from a wealthy U.S. businessman. Although he has denied wrongdoing, he has pledged to quit if indicted.