"We hope the new initiative put forward by President Bush can help solve the Middle East conflicts, and bring the two sides back to the negotiating table, " said Liu during a regular press conference in Beijing.

When asked about Bush's suggestion that Palestine should change the leadership, Liu said, President Arafat is elected by the Palestinian people and recognized by the world community.

The spokesman said China is still studying Bush's speech.

US President Bush Monday unveil his long-awaited Middle East initiative, urging Palestinians to replace Yasser Arafat as their leader and adopt "a practicing democracy" leading to an independent state in three years.

"Peace requires a new and different Palestinian leadership so that a Palestinian state can be born," said Bush from the White House Rose Garden.

The message from Bush to replace Arafat echoed long-time Israeli demands. It was also a dramatic change in US policy and is likely to draw an angry response from much of the Arab world.

But Bush also had sympathetic words for both sides. To the Israelis, he remarked: "You have lived too long with fear and funerals."

To the Palestinians, he said, "For decades you've been treated as pawns in the Middle East conflict.?

Bush said the borders and certain aspects of a future Palestinian state's sovereignty would be provisional until resolved as part of a final settlement. He also identified two of the thorniest issues - the future of the disputed city of Jerusalem and the plight of Palestinian refugees - but offered no prescription.

"When the Palestinian people have new leaders, new institutions and new security arrangements with their neighbors, the United States of America will support the creation of a Palestinian state, whose borders and certain aspects of its sovereignty will be provisional until resolved as part of a final settlement in the Middle East," Bush said.

Both Israel and Palestine respond swiftly to Bush's remarks.

Arafat welcomed Bush's Mideast policy speech as a "serious effort to push the peace process forward."

Israeli Prime Minister Ariel Sharon also echoed Bush. A statement from his office said that "when the Palestinian Authority undergoes genuine reforms and a new leadership takes its place at its head ... it will be possible to discuss ways of moving forward by diplomatic means."

However, it remained unclear whether Monday's speech would motivate the two sides to end their 21-month conflict and resume peace negotiations - especially since Bush offered no mechanism for preventing future Palestinian attacks and Israeli military retaliations from derailing diplomatic efforts, as they've done to date.

Palestinian officials rejected Bush's call for a new Palestinian leadership "not compromised by terror" -- a reference to the scores of suicide bombings and shootings that Israel has blamed at least indirectly on Arafat, and which the United States has said Arafat should have done more to prevent.

Bush's address had been planned for last week, but continuing violence delayed it.

China Makes Concrete Effort for Middle East Peace Process

The Chinese government is constantly concerned about the Middle East peace process, and has made concrete efforts in this regard, said Liu.

Vice Foreign Minister Yang Wenchang has just paid a visit to the Middle East where he held constructive talks with Israeli Prime Minister Ariel Sharon and President Yasser Arafat of the Palestinian National Authority, contributing to the peace process in this area, said Liu.

Yang was quoted by Liu as saying China has always regarded Palestine to be at the core of the Middle East issue, and without a just solution to the Palestinian issue or the restoration of the Palestinian people's legal rights, there would be no security or peace in the area.

As a permanent member of the United Nations Security Council, China has taken a series of diplomatic actions to try to stop the Israel-Palestine conflict, ease tension in the area and guarantee Arafat's personal security, Liu said, noting that China will continue its moral support and assistance within its means for the just cause of the Palestinian people.

( June 26, 2002)