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The leader of the Hamas government in Gaza said Friday that U.S. President George W. Bush's visit to the region proved his bias toward Israel and hurt Palestinian aspirations for a state of their own.

Ismail Haniyeh spoke to reporters after Friday prayers as Bush wrapped up a three-day visit to Israel and the West Bank, seat of the Ramallah-based government of moderate President Mahmoud Abbas, Haniyeh's rival.

During his visit, Bush laid out U.S. expectations for a peace deal, which he said should be completed this year. He singled out Gaza - which Hamas violently seized in June - as a problem that could not easily be solved in the 12 months remaining in his presidency.

The international community is boycotting Hamas because of its refusal to recognize Israel's right to exist and renounce violence.

Haniyeh said Bush's explanation of his bottom lines for a peace deal were based on promises to Israel, and don't serve Palestinian interests.

"Bush gave Israel all the required pledges to solidify its occupation and to wipe out basic Palestinian rights and sacred issues, while he gave the Palestinians more illusions and slogans, and loose words that only express the deception which has characterized this visit," Haniyeh said.

During his visit, Bush urged Israel to end its 40-year occupation of the West Bank and said a Palestinian state should be contiguous, a nod to Palestinian opposition to a state broken into pieces by Israeli settlements and military installations.

At the same time, Bush came out on Israel's side on two important issues, implying that major Jewish settlement blocs in the West Bank should remain in Israeli hands in a final peace deal and that Palestinian refugees should not be resettled inside of Israel.

Haniyeh said Bush's suggestion that Palestinian refugees receive compensation is unacceptable, and that the millions of refugees and their descendants from the 1948 war that accompanied Israel's creation must return to their original homes inside Israel.

"These concepts are totally unacceptable to us, and can in no way commit our people and the next generations," he said.

"The problem of Palestine will remain alive. A short visit of a few hours can't reduce this historic right and shrink the future of Palestinian generations on the land of Palestine."

Haniyeh criticized Bush's characterization of Hamas as an obstacle to peace.

"This is sowing the seeds of sedition and is an attempt to create the atmosphere for internal Palestinian wars," he said. Haniyeh appealed to Abbas not to slide behind the U.S. administration, saying he would be endangering his leadership.

Israeli official: Israel views positively Bush's statements on a final status peace treaty

Israel views positively U.S. President George W. Bush's statements Thursday calling for a final status peace treaty between Israel and the Palestinians prior to the end of his term in office, an Israeli official told Haaretz on Thursday.

"We see the Bush remarks as the basis of moving forward. We accept them. We see them as consistent with understandings with the Americans and as a positive foundation for moving forward," said the official, speaking on condition of anonymity.

Bush implored senior cabinet ministers at a dinner Thursday evening to work to promote the peace process, telling them that the current situation cannot continue and efforts to achieve a peace treaty must be made.

Earlier, Bush made statements summing up his visit to Israel and the Palestinian Authority. "There should be an end to the occupation that began in 1967," Bush said, presenting an outline for solving most of the core issues, which would include a compensation mechanism for Palestinian refugees, a contiguous Palestinian state, and secure and defensible borders for Israel.

Bush met with the ministerial forum at a dinner in his honor hosted by Prime Minister Ehud Olmert at his official residence in Jerusalem. One of the president's messages was about domestic Israeli politics. "Take care of Olmert, so he will stay in power," Bush said. "He's a strong leader. Israeli politics is like karate, you never know when the next chop will come."

Olmert said at the dinner that the peace process must go forward. Vice Premier Haim Ramon agreed with Bush's statement on the necessity of creating a Palestinian state. "Israel's problem is the occupation, which jeopardizes [our existence as] a Jewish and democratic state," Ramon said. "That's not the Palestinians' problem, that's our problem."

Shas chairman Eli Yishai, the minister of industry, labor and trade, raised reservations, telling Bush, "I appreciate your visit and your concern for Israel but we cannot make peace with half of the Palestinian nation, while Abu Mazen [Palestinian President Mahmoud Abbas] does not control the Gaza Strip."

Yishai recited several psalms emphasizing the importance of Jerusalem and said he would not compromise on the unity of the capital.

Acting against the wishes of the prime minister, Yishai gave Bush a letter from Shas spiritual leader Rabbi Ovadia Yosef urging the release of convicted U.S. spy Jonathan Pollard, as well as a letter from Pollard's wife, Esther.

Israel sees Bush's push for reaching a peace treaty with the Palestinians within a year as a positive step, the Israeli official said Thursday.

The Israeli response was the first to Bush's call for an end to what he said was the 40-year "occupation" of the West Bank, and for signing a peace treaty before he leaves office in January 2009.

Bush's comments marked a hardening of his tone toward Israel and could put Olmert at odds with right-wing members of his coalition who oppose sweeping peace concessions.

After returning from Ramallah to Jerusalem on Thursday afternoon Bush read out a summary of his visit, laying out his vision for resolving such issues as the Palestinian refugees, which he said would be resolved by the creation of a Palestinian state and compensation.

"I believe we need to look to the establishment of a Palestinian state and new international mechanisms, including compensation, to resolve the refugee issue," Bush said.

"The agreement must establish Palestine as a homeland for the Palestinian people, just as Israel is a homeland for the Jewish people.

"These negotiations must ensure that Israel has secure, recognized, and defensible borders," he said. "And they must ensure that the state of Palestine is viable, contiguous, sovereign and independent."

Bush also named Lt.-Gen. William Fraser to monitor the Israeli-Palestinian road map for peace, the White House said Thursday. Fraser, who is Assistant to the Chairman of the Joint Chiefs of Staff, will "help monitor road map commitments", White House spokesman Gordon Johndroe said.

Meanwhile, senior PA officials expressed satisfaction with Bush's statements in Ramallah on Thursday, even though the visit resulted in no major achievements for the Palestinians. They emphasized his call for an end to the Israeli occupation and to Israeli building in the settlements and in favor of a peace treaty by the end of the year.

The head of the Palestinian parliament's foreign policy committee, Abdallah Abdallah, told Haaretz on Thursday that, "The first seven years of Bush's presidency were wiped out as far as we're concerned ... he changed, but we can't expect him to be Santa Claus and to bring us a state for the New Year."