President Bush praised what he called a new Arab understanding of the need to fight Middle East terrorism and welcomed Egyptian President Hosni Mubarak to Camp David expecting to hear a firm appeal for a timetable on a Palestinian state.

Bush said Friday that after he consults with Mubarak and Israeli Prime Minister Ariel Sharon, he will reveal his plan for putting peace negotiations back on track.

"Progress is being made," Bush said. "The Arab world now understands they need to be involved in pushing for peace and fighting against the terrorist actions that make it very difficult to achieve a peace."

Bush and Mubarak planned to talk at a Friday night dinner attended only by them and their respective national security advisers. They will hold broader discussions Saturday with Secretary of State Colin Powell and Vice President Dick Cheney.

Bush is to meet with Sharon on Monday. Later this summer, probably in Turkey, he intends to deliver a speech outlining his ideas for pushing the peace process forward, White House officials say.

The president wants to pursue two tracks: to urge Palestinians and Arab leaders to bring more democratic ways into the Palestinian Authority; and to offer suggestions for negotiations, perhaps a timetable of sorts toward Palestinian statehood.

The Bush administration hopes the promise of a democratic, peaceful Palestinian Authority would bolster confidence among Israelis that their country soon would be more secure. The push for negotiations toward a Palestinian state would give Arab leaders and Palestinians hope that the called-for changes could yield results for the Palestinians.

Bush is not expected to offer a detailed peace plan in the speech. He and his advisers have concluded that such a plan could not be implemented without more democratic Palestinian institutions.

Bush intends again to urge Arab leaders to condemn terrorism, stop supporting it and curb incitement of violence through state-run media. The administration has seen some progress on that front, but not enough, U.S. officials say.

Asked Friday if the administration is working on a draft peace plan for Bush to present after his consultations with Mubarak and Sharon, White House spokesman Ari Fleischer said: "The president is still in the phase now of listening and gathering ideas."

Advisers have said they are preparing a series of options for Bush, including a timetable for peace talks. The president hopes to have the new initiative in place in time for a U.S.-sponsored Middle East conference next month in Turkey, aides said.

Mubarak is bringing Bush an urgent appeal to set a schedule for ending Israel's hold on the West Bank and Gaza and for Palestinian statehood.

The Egyptian busied himself with meetings while Bush was away Friday, sitting at Blair House with Powell, Bush's national security adviser Condoleezza Rice and a group of rabbis, among others. Powell said he and Mubarak discussed "some of his ideas, some of our ideas," but he would not reveal whether the ideas involved timetables.

Before Mubarak's arrival, Powell discussed the Middle East situation by telephone with U.N. Secretary-General Kofi Annan and the Saudi foreign minister, Prince Saud al-Faisal.

The Egyptian president also did media interviews in which he stressed that the United States must come up with a plan for negotiations and a timetable for a Palestinian state, because Sharon and Palestinian leader Yasser Arafat are too much at odds to agree on anything.

"You can't leave Sharon and Arafat alone to solve the problem," Mubarak told the Los Angeles Times. He said he hopes for a negotiated settlement in "maybe 2004, maybe 2005. But three years from now, I think we should reach a solution."

He also suggested that U.S. officials have been too hard on Arafat, telling CNN it is virtually impossible for Arafat to rein in militants and halt suicide bombings when he has been restricted himself.

"To control it 100 percent is impossible," Mubarak said. "He has no police, no intelligence, nothing to use against these people.

"In every act of violence, ... you expect that Arafat is responsible. Whether he's responsible or not, the statement comes is Arafat is responsible," Mubarak said.

Bush maintained his hard position. "I still am disappointed in Mr. Arafat's leadership. He needs to cut off terrorist activities," Bush said.

In addition to the discussions with Mubarak and Sharon, Bush and top aides will consider ideas toward future plans from CIA Director George Tenet and Assistant Secretary of State William Burns, both of whom spent several recent days conferring with Middle East leaders.

U.S. officials said the ideas received from these contacts will leave the administration in a better position to move forward next week on its three major goals for the Middle East.

They are rebuilding security arrangements involving Israel and the Palestinians; establishing good governance in the Palestinian territories in preparation for statehood; and finding ways to reopen Israeli-Palestinian political negotiations.