White House press secretary Ari Fleischer was quick to play down Powell's comments that Bush might propose the creation of 'a provisional Palestinian state' as a step towards full statehood. Fleischer said Powell's words were 'reflective of a variety of pieces of advice that people listen to'.

Powell's comments were made the day after Bush, with Israeli Prime Minister Ariel Sharon at his side after their sixth face-to-face meeting, said that conditions were not right for a proposed summer meeting of foreign ministers because 'no one has confidence' in Yasser Arafat's Palestinian administration.

Israeli and US pressure on Arafat has intensified as a result of the ongoing suicide bombing campaign in Israeli and the occupied territories. Israeli forces re-entered Ramallah on 10 June, surrounding Arafat's headquarters and arresting several dozen Palestinians, before withdrawing on 12 June.

The impression of either a policy schism within the US government, or a tailoring of statements to suit different audiences, was reinforced by the apparent alignment of Powell's statement with the proposal pushed by President Mubarak of Egypt, in a 6 June meeting with Bush, for the early declaration of a Palestinian state.

'You have to have something in the very near future that the Palestinian people can see as a step on the way toward the settlement of this in a comprehensive way, something they can put their hopes in,' said Powell. 'Just remember, we took the first 16 months waiting for the security piece to come into place. But it didn't come into place. The terror continues.'

With the Foreign Minister Prince Saud al-Faisal due to meet Bush on 13 June, the Saudi peace initiative has remained in the spotlight. In the aftermath of a meeting between Sharon and Prime Minister Tony Blair, UK foreign office officials revealed on 13 June that London and Washington are exchanging views on producing a resolution 'enshrining the Saudi Peace Plan'.