Bush wraps up Middle East visit on peace, Iran, oil

By Tabassum Zakaria

RIYADH (Reuters) - President George W. Bush ends a Middle East trip on Wednesday in which he told regional allies that Iran is a threat, Israeli-Palestinian peace efforts need support, and high oil prices are in no one's interest.

Bush spent two nights in Saudi Arabia stressing close personal ties and during an overnight stay at King Abdullah's desert ranch planned to bring up his concern about oil prices that have hit $100 a barrel.

"My point to his Majesty is going to be, when consumers have less purchasing power because of high prices of gasoline ... it could cause this economy to slow down. If the economy slows down, there will be less barrels of oil purchased," he said in an interview with a small group of reporters.

But the dominating themes of Bush's trip, which ends after a stop in Egypt on Wednesday, were Israeli-Palestinian peace efforts and U.S. tensions with Iran.

Last week Bush made his first presidential visit to Israel and the occupied West Bank and said he expected the two sides to sign a peace treaty before he left office in January 2009.

He tried to rally Arab support for peacemaking efforts, including reaching out to Israel, during his visit to Gulf allies including Kuwait, Bahrain and the United Arab Emirates.

"They wanted to make sure that the efforts by the United States were real," Bush said on Tuesday.

Saudi Arabia, considered a linchpin in any broader Israeli-Arab reconciliation, criticized Israel for settlement expansion and suggested it had no immediate plans to take any significant new steps toward Israel.

"I don't know what kind of outreach we can have for the Israelis but to offer a peace plan for the region," Saudi Foreign Minister Saud al-Faisal said at a news conference with Secretary of State Condoleezza Rice.

"So I don't know what more outreach we can give to the Israelis," he said. An Arab League summit last March reiterated a 2002 offer of peace with Israel if it returned occupied land.

Bush has also been trying to shore up support against Iran, and he told allies that he still considered Tehran a threat despite a U.S. National Intelligence Estimate that said Iran stopped its nuclear weapons program in 2003.

"I have spent a fair amount of time on Iran in every stop," Bush said.

"I just made it clear that all options are on the table, but I'd like to solve this diplomatically ... and talked about making sure consistent messages emanated from all parts of the world to the Iranians," Bush said.

Analysts say that while Washington's Arab allies are wary of Iran's growing influence in the region, they do not want to see a U.S. military confrontation with Tehran.

"Iran is a neighboring country and important in the region. Naturally, we have nothing bad towards Iran," the Saudi foreign minister said. "We hope that Iran also responds to the international legitimacy requirements."