Increasing the United States' involvement in the Middle East peace process, President Bush has invited Palestinian President Mahmoud Abbas (search) and Israeli Prime Minister Ariel Sharon (search) to separate meetings in the United States, Secretary of State Condoleezza Rice announced Monday.
Rice finished two days of meetings in Israel and the West Bank with an announcement both side have accepted the invitation.
She also said the United States' partners in a coalition to promote Middle East peace would soon hold a meeting that would be the first since the death of Palestinian leader Yasser Arafat (search) gave new life to peace hopes between Israel and the Palestinians.
Bush may attend that meeting as well, Rice said. It was not clear when that meeting might happen.
Bush's Abbas invitation represents a significant shift from the U.S. position in recent years when he viewed Arafat as a major impediment to peace. The Bush administration refused to deal directly with Arafat and peace negotiations stalled.
Rice also said Lt. Gen. William E. Ward (search) was named a new Palestinian "security coordinator" and would make his first trip to the region with the next two weeks.
"The Palestinians will be the first to tell you that they need help," training, equipping and unifying their security forces, Rice said.
She said Ward will have direct line to her.
In a visit to the West Bank on Monday Rice also said the United States will provide more than $40 million in aid to the Palestinians during the next three months.
Rice, at a news conference in Ramallah with Abbas, called the aid package a "quick action program" that would have an "immediate positive impact."
She said the money would be used to create jobs and improve infrastructure.
"This is a time of hope, a time we can hope for a better day for the Palestinian and Israeli people both," she said.
At the news conference Rice also announced the United States would appoint the coordinator to assist Palestinian security forces.
Rice has previously said the United States has no plans to appoint a high-level diplomatic envoy to represent the United States in the peace process. The security coordinator would represent a less formal U.S. involvement.
Ward, in a military career spanning more than three decades, has served in top Army positions as well as on the Joint Chiefs staff.
The three-star general in late 2002 was appointed to the command of the 17,000-strong peacekeeping contingent in Bosnia. He also has served in Korea, Egypt, Somalia and Europe.
Abbas thanked Rice for the U.S. assistance He also thanked her for helping last year when Israel announced plans to seize some property owned by Palestinians in Israel.
"We hope that the Israeli side also will meet its obligations because this is the only path" to achieve the ideal of the two states existing side by side in peace, Abbas said.
Rice said the $40 million in aid is part of the $350 million that Bush pledged during his State of the Union address.
According to the State Department, the aid will be from money set aside earlier for a seawater desalinization plant in Gaza. The money will not go directly to the Palestinian Authority (search), but will be channeled through private relief and economic groups.
Rice's two-day visit to Israel and the West Bank headquarters of the newly elected Palestinian government is meant to nudge both sides to take hold of what Rice has called "a time of opportunity" and end four years of war.
She said what she has heard from both sides bodes well for their upcoming summit in Egypt.
"The U.S. will do its part," she said.
Rice met privately Sunday with Israeli Prime Minister Ariel Sharon, the former warrior turned potential peacemaker.
Sharon greeted Rice warmly, telling her in English, "you are among friends."
"Her visit, I believe, will contribute to the peace process that we so much want to advance," Sharon said in Hebrew.
In a boost to peace prospects, the mainstream Palestinian movement Fatah said Sunday it would agree to a mutual cease-fire with Israel in the West Bank and Gaza. Fatah also ruled out attacks against civilians inside Israel.
Palestinians hope for such a mutual declaration when Abbas meets Sharon at a summit in Egypt. Rice is not attending that gathering.
Rice's visit also comes as Israel backed off its long-standing refusal to release Palestinian prisoners accused of violence against Israelis. Israeli officials said top aides to Sharon and Abbas also have agreed to form a committee to study additional Palestinian prisoner releases.
A lasting peace deal for Israel and creation of a Palestinian democracy are chief foreign policy goals for the United States in President Bush's second term.
As Rice visited European capitals last week, she repeatedly said that Israel and the Palestinians should control their own path to peace, with help from the United States, Europeans and others.
Rice is making an eight-day trip through Europe and the Middle East, her first overseas diplomacy since taking over from Colin Powell (search) at the State Department.
Arafat's death in November invigorated the stalled peace process, and more hopeful signs followed.
The new Palestinian leadership has embraced nonviolence, deployed police to keep the peace in Gaza and won pledges from militants to halt attacks on Israel.
Israel has promised to release hundreds of prisoners, stop offensive military operations and gradually pull out of five West Bank towns.