Prime Minister Ariel Sharon and US President George Bush emerged from their 45-minute Oval Office meeting yesterday in good spirits. In his remarks afterwards to reporters, Bush put to rest - at least publicly - speculation that he was pressuring Israel not to respond militarily to an Iraqi attack. “If Iraq attacks Israel tomorrow, I would assume the Prime Minister would respond," Bush said. "He’s got a desire to defend himself." Bush stuttered a bit on the word "desire," leaving the impression that he did not want to say that Israel "has a right to defend itself."



Israel Radio reported today that Bush guaranteed to give Israel two weeks' advance notice before attack on Baghdad.



President Bush said that he understands what terror has done to the Israeli economy, but nevertheless, “We have great confidence in the Israeli economy… The greatest asset Israel has is the brainpower and ingenuity of her people. And I’m convinced that the economy will be strong.” He reiterated his support for a Palestinian state alongside Israel, and said that he will soon dispatch US Assistant Secretary for Near Eastern Affairs William Burns back to the Middle East to oversee reforms in the Palestinian Authority.



A joint statement issued after the meeting said that Bush and Sharon had agreed that Israel "would consider favorably the gradual return and scheduled transfer of all PA tax funds collected by Israel, on the unequivocal condition that there would be full US-led monitoring" of the transfers. Israel holds several hundred million dollars of PA tax revenues, which it has frozen pending the establishment of a satisfactory supervisory mechanism that would ensure that the money is not used to support anti-Israel terrorism. Housing Minister Natan Sharansky has said he is against paying the PA, and MK Avigdor Lieberman compared previous transfers of money to the PA to "Switzerland's financial support for Nazi Germany, which allowed the Nazis to hold out for another two years."



Prime Minister Sharon thanked Bush for his "leadership in the international war on terror," and expressed his confidence that "the world’s terrorism will be contained thanks to [Bush’s] initiatives." Sharon added that Israel has been facing terror for 120 years and still is today. He said that Israel has never had as good relations with a US president as it has with President Bush. The Israeli leader met last night with the US Vice President and Defense Secretary as well.