Despite Israel's skepticism and a fresh burst of Palestinian terror, the Bush administration is considering a conference of top U.S., U.N., Russian and European Union ministers within the next two months.

The aim is to develop details of a roadmap for peacemaking and for change within the Palestinian leadership. By 2005, there would be a Palestinian state on West Bank and Gaza land now held by Israel.

Secretary of State Colin Powell, Russian Foreign Minister Igor Ivanov, U.N. Secretary-General Kofi Annan and top European Union officials would attend the conference.

The tentative date is Dec. 20, in Europe or the Middle East, but two U.S. officials told The Associated Press Thursday the conference might not be held until January and in Washington.

President Bush has endorsed statehood for the Palestinians but has insisted on an end to corruption and ties to terror in the Palestinian Authority as conditions. He also has called for new leadership to replace Yasser Arafat.

The administration has moved slowly along the peace track, insisting first on a sharp decrease in terror attacks on Israel civilians.

A State Department spokesman, Philip T. Reeker, said Thursday, "Progress toward the realization of Palestinian aspirations and the realization of the president's vision of two states living side by side in security is simply impossible while violence and heinous attacks continue."

Reeker referred to a Palestinian suicide bombing on a Jerusalem bus Thursday.

Bush and British Prime minister Tony Blair deplored the attack during a meeting of NATO leaders in Prague in the Czech Republic.

Bush said he was "greatly disturbed" by the violence. He insisted that all countries in the region step up and fight back against terrorists.

With many Arab leaders warning that any U.S.-led attack on Iraq could destabilize the Arab world, Blair said it was important to tackle the Israeli-Palestinian crisis in concert with the campaign to disarm Iraq's Saddam Hussein.

"The whole world wants to see us now take a very firm stand against terrorism, against issues of weapons of mass destruction, but also try and make sure we can provide a secure future with lasting peace in the Middle East," Blair said.

Bush reiterated his goal was two independent states — Israel and Palestine. "And we will continue to work with those who share that vision for the sake of the Israeli people and for the sake of the Palestinian people," the president said.

Powell called on the Palestinians to take "immediate and sustained steps" to wipe out the terror structure.

Powell also condemned the bombing and offered his sympathy to the Israeli government, the Israeli people and the families of the victims, in a statement issued in Washington by the State Department.

He also telephoned the Israeli foreign minister, Benjamin Netanyahu.

Natan Sharansky, a deputy Israeli prime minister, told the Bush administration Wednesday its efforts at peacemaking cannot make much headway so long as the Palestinians are ruled by a corrupt dictatorship.

At a very minimum, the roadmap plan should be put on hold until Israel and the Palestinians hold elections, Sharansky said after talks with Vice President Dick Cheney and Deputy Secretary of State Richard Armitage.

Powell, in a CBS-TV interview, said a settlement would require both a commitment by Palestinian leaders to end terror and by Israel to Palestinian statehood.

It is not the administration's fault there is no agreement, he said. "It's a failure of past policies, its a failure on the part of a lot of people who have been unable to come together, bring this violence under control, this terrorism under control, and get a peace process moving," he said.

The Bush administration has broken with a quarter-century of U.S. diplomacy in the Middle East by sharing its mediator role with the United Nations, Russia and the European Union.

The three U.S. partners have taken a stronger stand in support of Palestinian demands. Annan, for instance, called Israel an expropriator of Arab land in a speech last week at the University of Maryland and said it must surrender nearly all of the West Bank and Gaza for peace with the Arabs.