While welcomed by Israeli Prime Minister Ehud Olmert and Palestinian president Mahmud Abbas it was rejected by Hamas, further widening the factional rift after the Islamists' bloody takeover of the Gaza Strip last month.

Elected officials welcomed the move, but Israeli and Palestinian commentators were wary of the initiative, the latest in a series of international efforts to solve the decades-old conflict.

"The call by Bush could or could not be a transformation, as we are used to hearing talk of initiatives, proposals of conferences that most of the time achieve nothing," wrote the main Palestinian daily Al-Quds.

"We have yet to see if this time is different or if it is a scenario that we have already seen," it said.

Israeli observers were even harsher.

"The old-new presidential vision which was outlined yesterday will end just like its predecessors," wrote the Maariv tabloid, Israel's second-largest daily. "Forceful declarations, high hopes, a grandiose plan and in the end it all comes to nothing but shattered hopes and despair."

The top-selling Yediot Aharonot said a comparison of Bush's speech on Monday and the first major one he gave on the conflict five years ago showed that "peace in the Middle East is like the horizon -- the nearer you get, the further away it is."