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President Bush set a strong tone Tuesday on the opening day of the Mideast peace conference in Annapolis, Md., announcing a joint statement from Israeli and Palestinian leaders who pledged to move toward ending violence by the end of 2008.

Reading what he called a "joint understanding" authorized by Israeli Prime Minister Ehud Olmert and Palestinian Authority President Mahmoud Abbas, Bush said the men had committed "to bring an end to bloodshed, suffering and decades of conflict between our people, to usher in a new era of peace, based on freedom, security, justice, dignity, respect and mutual recognition."

The statement also said the leaders "agree to immediately launch good-faith, bilateral negotiations in order to conclude a peace treaty resolving all outstanding issues" between the two states.

Speaking at the U.S. Naval Academy, Bush was joined on the stage by the two leaders as he announced the agreement that had been up in the air until the president spoke. Dozens of foreign dignitaries and U.S. officials were also in attendance.

"We agree to engage in vigorous, ongoing and continuous negotiations, and shall make every effort to conclude an agreement before the end of 2008," a bespectacled Bush said, continuing to read the statement.

The White House later said Bush needed his reading glasses because the document he was reading from was so fresh, aides hadn't had time to reprint the agreement in a more legible size as leaders rushed to the last minute to finalize the wording.

The Palestinian and Israeli leaders also agreed to form a group that would begin meeting Dec. 12, and continue biweekly meetings thereafter, and agreed to adhere to the Quartet-issued roadmap dating back to 2003 until they reach a peace treaty.

In his remarks following the reading of the statement, Bush sounded a continued optimistic tone for the outcome of the talks, despite a lead up to a conference that had diminished expectations.

"The Palestinian people are blessed with many gifts and talents. They want the opportunity to use those gifts to better their own lives and build a better future for their children ... The people of Israel have just aspirations as well. They want their children to be able to ride a bus or go to school without fear of suicide bombers," Bush said.

"Today Palestinians and Israelis each understand that helping the other to realize their aspirations is key to realizing their own aspirations. Both require an independent, democratic, viable Palestinian state. ... Such a state will provide Palestinians with the chance to lead lives of freedom, purpose and dignity. And such a state will help provide Israelis with something they have been seeking for generations: to live in peace with their neighbors," the U.S. president said.

Bush said "a battle is under way for the future" of the troubled region, but he believed peace could prevail.

"The time is right, the cause is just, and with hard effort, I know they can succeed," Bush said.

Bush was followed by Abbas, who made an impassioned appeal to Israelis to support the peace process, saying that war and terrorism "belong to the past."

"Neither we nor you must beg for peace from the other. It is a joint interest for us and you," he said. "Peace and freedom is a right for us, just as peace and security is a right for you and us."

"It is time for the circle of blood, violence and occupation to end. It is time for us to look at the future together with confidence and hope. It is time for this tortured land that has been called the land of love and peace to live up to its name," Abbas said.

But he gave no indication that the Palestinians were willing to concede on any of the flashpoint issues that have derailed previous peace efforts: the status of disputed Jerusalem, the return of refugees, the borders of an independent Palestine and the maintenance of Israeli settlements.

"I have the right here to defend openly and with no hesitation the right of my people to see a new dawn, with no occupation, no settlement, no separation wall, no prisons with thousands of prisoners, no assassinations, no siege, and no roadblocks around villages and cities," Abbas said.

Following Abbas, Olmert said "negotiations will address all the issues which thus far have been evaded."

"We will not avoid any subject," he said. "While this will be an extremely difficult process for many of us, it is nevertheless inevitable. I know it. Many of my people know it. We are ready for it."

Speaking directly to the Arabs at the conference, he said: "It is time to end the boycott and alienation toward the state of Israel," referring to Arab nations who do not have relations with Israel.

"We no longer and you no longer have the privilege of clinging to dreams which are disconnected from the suffering of our peoples," he said.

After months of frantic diplomacy, top officials from more than 40 nations were converging on this historic state capital to try to get commitments for the first formal Israeli-Palestinian peace talks in seven years.

The Bush administration has been buffeted by skepticism over prospects that the Annapolis Conference can set the stage for the creation of a Palestinian state by the end of Bush's second term in early 2009. Because of this, administration officials from the president on down have sought to minimize expectations for any major breakthrough here. But they also insist that the exercise is not futile.

Bush, who met separately with Abbas and Olmert on Monday ahead of the conference, said the purpose of Annapolis is to not only restart talks, but also gain support from the Arab world and the international community for the hard work ahead. Saudi Arabia and Syria — key players — are among 16 Arab nations attending the conference.

"Our purpose here in Annapolis is not to conclude an agreement. Rather, it is to launch negotiations between the Israelis and Palestinians," Bush said earlier. "For the rest of us, our job is to encourage the parties in this effort and to give them the support they need to succeed."

For all the high-anxiety surrounding this conference, there were lighter moments as well — the kind of intervals typified by the so-called "class picture" gatherings of world leaders engaged in high summitry.

At one point Tuesday morning, Bush, Olmert and Abbas stepped out of the superintendent's quarters building at the U.S., Naval Academy and waved to media representatives staking out the event nearby. Bush, who was in the middle of the two leaders, exclaimed: "Good morning everybody. Thank you. It's a beautiful day here."

He declined to answer a question about what he hoped to accomplish at the conference.

The Associated Press contributed to this report.