Bush in Israel as scandal clouds peace hopes

By Matt Spetalnick and Tabassum Zakaria

JERUSALEM (Reuters) - U.S. President George W. Bush backed Lebanon's government and Israeli-Palestinian peace efforts at the start of a Middle East visit on Wednesday in which he praised Israel at 60 as a model for regional democracy.

Bush, in Jerusalem to celebrate the anniversary of Israel's founding in 1948, accused Iran of meddling in Lebanon's affairs. He also said Washington would stand with Israel against the "existential threat" a nuclear-armed Iran would pose.

Taking no questions after meeting scandal-hit Israeli Prime Minister Ehud Olmert, Bush gave no assessment in remarks to reporters of the chances of reaching an Israeli-Palestinian peace deal before he leaves the White House in January.

Without mentioning statehood negotiations that have shown little sign of progress, Bush said the United States would continue to support Palestinians "who don't share" the vision of Hamas Islamists opposed to the peace efforts.

In the latest setback to an agreement with Palestinian President Mahmoud Abbas, Olmert has been hit by calls to resign over suspicions he took bribes from a U.S. businessman.

Although Olmert has denied wrongdoing, he has pledged to resign if indicted, which could lead to a snap election certain to delay a peace deal.

Bush will not visit the Palestinian territories during his three-day visit but planned to meet Abbas in Egypt on Saturday.

After his talks with Olmert, Bush reserved some of his strongest comments for the situation in Lebanon, where the Iranian-backed Hezbollah movement briefly took over parts of Beirut in fighting that erupted last week.