WASHINGTON (AP) – Welcomed warmly in the White House, Palestinian leader Mahmoud Abbas told President George W. Bush of the Palestinians” pride in their democracy but warned that Israel must end its &#34policies of occupation&#34 to ensure peace.

&#34Peace requires a departure from the policies of occupation and the adoption of the principle of freedom,&#34 Abbas said, Bush standing by his side Thursday in the White House Rose Garden.

&#34Once again,&#34 Abbas said, &#34we repeat our pride of our democratic experience.&#34

He said, however, &#34democracy can lose a lot of its momentum in the absence of freedom and with the continuation of occupation.&#34

Bush said he has never been more confident of peace between the two longtime foes, but &#34old feuds aren”t settled easily&#34 and it may not happen before he leaves office in 2009.

In June 2002, when Bush set forth his &#34vision&#34 of an independent Palestinian state living in peace beside Israel, he set 2005 as his goal for statehood.

&#34It takes a while,&#34 Bush said. &#34We will work hard to lay that foundation so that the process becomes irreversible.&#34

At their joint news conference after an hour-long meeting in the Oval Office, Bush cautioned Abbas that &#34the way forward is confronting the threat armed gangs present to creation of a democratic Palestine.&#34

Both Bush and Israeli Prime Minister Ariel Sharon have emphasized that the Palestinian Authority”s first objective must be to eliminate the terror threats that have dogged Israel since its inception six decades ago.

Bush did not directly question Abbas” intention to permit political participation by Hamas and other Palestinian groups that have carried out terrorized Israelis. Nor did Bush publicly urge Abbas to screen out extremists in those groups from participating in the Palestinians” democracy, a proposal discussed with other Palestinian officials before Abbas arrived in Washington for their first White House meeting since May.

In Jerusalem, Zalman Shoval, a former Israeli ambassador to Washington and an adviser to Sharon, said he was not concerned. Shoval said he was confident Bush had told Abbas privately that Hamas should not play a role in January”s legislative elections.

Hamas candidates already have been elected to local offices in the Palestinian territories.

State Department spokesman Sean McCormack said the U.S. view remains that Hamas is a terrorist organization. But he said, &#34It is also the case that how the Palestinian political process unfolds and evolves is a question for the Palestinian people.&#34

The Palestinian view is that allowing everybody to participate in the election makes it more legitimate, while the Bush administration considers participation by armed militia a contradiction to building a democratic state, said a senior U.S. official. And yet, the administration is not going to prescribe election laws for the Palestinians, said the official, who refused to be identified.

Saeb Erekat, senior Palestinian negotiator, said on Israel”s Channel 2 TV that &#34no one can get their political goals through the means of force.&#34

In a harsh reaction, Hamas spokesman Sami Abu Zuhri dismissed Bush”s remarks in support of Palestinian statehood. &#34This statement and this pledge to establish a state added nothing new for us,&#34 he said in Gaza City. &#34It”s an old promise without any credit, while we are witnessing unlimited support for the (Israeli) occupation.&#34

At their news conference, Bush was unqualified in his praise of Abbas as &#34a man devoted to peace and to his people”s aspiration for a state of their own.&#34

&#34Today the Palestinian people are closer to realizing their aspirations,&#34 Bush said.

Bush urged Israel to stop building settlements on the West Bank.

Israel should not undertake any activity that contravenes its road map obligations,&#34 Bush said, referring to a blueprint for peacemaking approved by the United States, the United Nations, the European Union and Russia.

Without elaboration, Bush said Israel would be &#34held to account&#34 for any actions that hamper peacemaking or burden the lives of Palestinians.

Bush said, however, that he was a &#34heck of a lot more confident&#34 of peace prospects than when he first took office five years ago. Both Abbas and Sharon are committed to making peace, he said.

Abbas, in response, insisted that Israel lift curbs on Palestinian travel in the West Bank, saying the restrictions had caused the Palestinians &#34hardship and humiliation.&#34

The Palestinian leader also criticized Israel”s security wall, particularly its location in Jerusalem, where the Palestinians intended to establish the capital of their state.

He assured Bush that election of a Palestinian legislature in January would establish one law to govern the area. That means, he said, that Palestinians must be able to cross between Gaza, which they took over after Israel”s withdrawal last month, and the West Bank. Roadblocks must be removed, settlement construction halted and construction of a security wall suspended, he said.

The roadblocks, imposed by Israel in response to deadly terror attacks, &#34unfortunately turned the lives of Palestinians into hardship, suffering, humiliation,&#34 Abbas said. He called the imprisonment of Palestinians &#34a very sensitive issue.&#34