"Mr. Arafat failed in that effort," Bush said, referring to the Palestinian Authority (search) president whom Israel blames for not stopping Palestinian terrorists. "Mr. Arafat has failed as a leader."
At the Camp David appearance, the president said Arafat allowed terrorists to operate freely even as Prime Minister Mahmoud Abbas sought restraint from groups like Hamas and Palestinian Islamic Jihad.
Abbas resigned earlier this month.
"Prime Minister Abbas made a good-faith effort to meet the commitments made at Aqaba, yet at every turn he was undercut by the old order," Bush said. "I remain committed -- solidly committed -- to the vision of two states living side by side in peace and security. Yet that will only happen with new Palestinian leadership committed to fighting terror."
Bush said that without leaders willing to stop terror, a peace process cannot be reached.
"The first thing that must happen is the absolute condemnation and defeat of those forces who would kill innocent people in order to stop the peace process from going forward," he said. "In order for there to be peace you must stop terror and it requires a collective effort."
King Abdullah praised the president for his commitment to the region, saying he believes recent efforts to bring Abbas and Israeli Prime Minister Ariel Sharon together marked a new start on the road map to peace.
"As you rightly said, we did see progress. Unfortunately there is a lull at the moment, but your [efforts have been to] reach out to the overwhelming majority of Israelis and Palestinians who have been suffering for so many years, and put your heart behind making their future rather hopeful, and this is what I believe this weekend is all about."
Abdullah, who speaks flawless English, and his wife were spending the weekend with the president and first lady at Camp David. Back in Washington, White House staff were cleaning up around the exterior of the presidential mansion to avoid any damage from the tropical-force winds expected to hit the nation's capital by way of Hurricane Isabel.
Bush also addressed the rehabilitation of Iraq, which has led to criticism by some in Congress who say the president has not done enough to get international support for reconstructing the country.
He said that progress has been steady, but added that it is in the interest of Jordan as well as Europe to make sure the country is stable.
The president goes to New York next week to address the U.N. General Assembly at its opening session and plead the case for international aid for Iraq. However, he said that he doesn't believe a U.S. draft resolution on getting international support would be ready by then.
Bush said the resolution must achieve several objectives.
"The whole purpose, of course, is to make sure that the nations feel -- if they need a UN resolution, they'll have one in order to justify participation. And the other thing, of course, is the UN resolution must promote an orderly transfer of soevereignty to what will be a freely elected government based upon a constitution," he said.