President George W. Bush yesterday launched a fresh push to revive the stalled Middle East peace process, offering US leadership of efforts to find a two-state solution to the conflict.

Mr Bush said Palestinians faced a moment of choice be-tween peace and violence and urged the international com-munity to help them choose the better path. "Responsible nations have a responsibility to help clarify the way forward," he said.

He pledged $190m (£93m, €138m) of economic assistance to the Palestinian territories and $80m to help train Palestinian security forces.

The aid was aimed at strengthening Mahmoud Abbas, the embattled Palestinian president, whose Fatah party is engaged in a violent power struggle with Hamas, the Islamic militant group. Hamas seized control of Gaza earlier this year, while Fatah remains in charge of the West Bank.

The US initiative came as Tony Blair, former British prime minister, prepares to start his role as envoy for the Middle East Quartet. The Quartet - comprising the US, the European Union, Russia and the United Nations - is scheduled to meet in Lisbon on Thursday for the first time since Mr Blair's appointment.

Condoleezza Rice, US secretary of state, and Ban Ki-moon, UN secretary-general, are expected to attend.

The meeting will also be the Quartet's first since Hamas captured Gaza in June, driving a wedge through the Palestinian territories.

Mr Bush said the US would offer "strong support" for Mr Blair in his new role of mobilising international assistance for the Palestinians.

Yesterday's intervention by Mr Bush came after Mr Abbas consolidated his control of the West Bank on Saturday by installing an inter-im government of moderates. "The president sees there is an opportunity there now to show the Palestinian people a choice between the kind of violence and chaos under Hamas in Gaza and the prospect, under President Abbas and prime minister Salem Fayyad, for an effective democratic Palestinian state," said Stephen Hadley, US national security adviser.

Mr Bush set out a vision of Palestine as a "partner not a danger" for Israel and urged Palestinians to "demonstrate once and for all that terrorism has no place in a Palestinian state".

"The Palestinian government must arrest terrorists, confiscate illegal weapons and work to stop attacks on Israel," the president said, adding that the Palestinian Authority must also earn the trust of Palestinians by tackling corruption.

Israel and Arab states also had responsibilities to help find a two-state solution, he said.

Mr Bush and Ehud Olmert, Israeli prime minister, pledged last month to work together to strengthen Mr Abbas against Hamas, which the US and EU regard as a terrorist group.

Mr Bush linked the strife within the Palestinian territories to broader turmoil in the Middle East, saying it was part of the same struggle against extremists also faced by Lebanon, Iraq and Afghanistan. "Conceding any of these struggles to extremists would have deadly consequences for the world," he said.