Bush pushes peace, says U.S. "best friend" to Israel

By Tabassum Zakaria

JERUSALEM (Reuters) - President George W. Bush, in the Middle East to encourage struggling Israeli-Palestinian peace talks, has emphasized historic ties with Israel saying the United States was its "oldest and best friend in the world."

Bush, in Jerusalem to commemorate the 60th anniversary of Israel's creation, will visit the Roman-era fort at Masada and give a speech before the Knesset on Thursday.

Before making his second trip this year and also of his presidency to Israel, Bush had expressed hope that a peace deal could be reached by the time he leaves office in January, despite obstacles that have cropped up since promises were made in Annapolis, Maryland, last November.

In the latest setback to an agreement with Palestinian President Mahmoud Abbas, Israeli Prime Minister Ehud Olmert has been hit by calls to resign over suspicions he took bribes from a U.S. businessman.

Olmert has denied wrongdoing but has pledged to resign if indicted, which could lead to delaying any peace deal.

Violence around the Gaza Strip continues to hamper peace efforts. A rocket fired from the Hamas-controlled Gaza Strip struck a shopping mall in the southern Israeli city of Ashkelon and wounded several people as Bush and Olmert met in Jerusalem.

An Israeli air strike later killed two Hamas fighters and wounded four, the Islamist group and medics said.

The White House condemned the attack and blamed Hamas, which the United States considers to be a terrorist organization.