President George W. Bush told Israeli and Palestinian leaders gathered for a Middle East conference on Tuesday that the time was right to work toward peace but cautioned the path would be difficult.

Bush held a meeting with Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas shortly before opening a high-stakes conference that includes diplomats from more than 40 countries, including Syria and Saudi Arabia.

The time is right, the cause is just, and with hard effort, I know they can succeed, Bush said in remarks prepared for delivery to the day-long conference at the U.S. Naval Academy.

He planned to say the purpose at Annapolis was not to conclude an accord, but instead to launch negotiations between the Israelis and Palestinians.

The task begun here at Annapolis will be difficult, Bush said in the remarks released in advance by the White House. This is the beginning of the process, not the end of it, and much work remains to be done.

Finally embracing a hands-on approach he disdained after his predecessor Bill Clinton failed to broker a deal in the twilight of his presidency, Bush is hosting the most ambitious round of international Middle East diplomacy in seven years.

The talks are aimed at jump-starting negotiations for creating a Palestinian state.

But no-one expects a swift breakthrough between the two sides. Olmert is politically weak at home and the Palestinians are deeply divided between those loyal to Abbas and those supporting Hamas, who violently oppose the talks.

BUSH UNDER FIRE

With only 14 months left in office, Bush has faced criticism for not having done more sooner on the effort, and it was unclear how hard he will push the parties to make compromises.

He planned to leave the conference at midday to return to the White House.

In his speech, he argued now is the time to pursue an agreement because Palestinians and Israelis have leaders determined to achieve peace and because we must not cede victory to the extremists in the Middle East.

Bush signaled the United States would not try to impose an agreement on the parties, saying our job is to encourage the parties in this effort -- and to give them the support they need to succeed.

All three leaders begin the effort politically weakened at home.

In Gaza, which is controlled by Hamas Islamists who oppose the meeting, tens of thousands joined an anti-Annapolis rally chanting Abbas is a traitor and Death to Israel, death to America. Security forces in Ramallah, Abbas's West Bank stronghold, dispersed crowds after scuffles at a protest.

Like the United States, many participants are driven by the desire to offset the growing influence of non-Arab Iran -- an opponent of peace with the Jewish state. Tehran said on Tuesday it had built a new long-range missile. The weapon matches the range of another Iranian missile that can hit Israel.

The Israelis and Palestinians, with assistance from the State Department, were still haggling over a joint document.

Efforts are still going on, but there is not much time left (to reach an agreement on the joint document, Ahmed Qurie, chief Palestinian negotiator.

FINAL STATUS TALKS

The document is meant to chart the course for negotiating the toughest final status issues of the conflict -- Jerusalem, borders, security and the fate of Palestinian refugees.

At Annapolis, the two sides are also expected to recommit to a 2003 road map calling for a freeze of Jewish settlement activity in the West Bank occupied by Israel since a 1967 war as well as a crackdown by Palestinians on their militants.

In his address, Abbas was expected to urge an immediate start to follow-up negotiations on these final-status issues.

Palestinian officials and U.S. diplomats have said in recent weeks that Russia, a member of the Quartet of Middle East mediators, may host a follow-up to Annapolis in three months.

(Additional reporting by Jeffrey Heller, Adam Entous, Mohammed Assadi, Caren Bohan and Tabassum Zakaria in Washington, Khaled Yacoub Oweis in Annapolis, Nidal al-Mughrabi in Gaza, Reza Derakhshi in Tehran, Wafa Amr in Ramallah and Rebecca Harrison in Jerusalem; Writing by Steve Holland; Editing by David Storey)

Israel George W. Bush