WASHINGTON, Dec 4: A 50-minute meeting between US President George W. Bush and President Musharraf focused heavily on the need for a Palestinian state, although the Pakistani leader also raised the issues of Kashmir and bilateral trade.

Both in their opening remarks and later responding to reporters, Mr Bush expressed unequivocal support for President Musharraf saying that he looks forward to "working closely" with him "for the next four years".

Gen Musharraf introduced the Palestinian issue by telling the US president that only the creation of a Palestinian state could end the emotional storm that has gripped the Muslim world for more than five decades.

"The most important issue, a solution of the Palestinian dispute, is in the interest of peace in the whole world," he said.

In his opening statement, Mr Bush said that Gen Musharraf could play a role in the creation of a Palestinian state and in restoring peace to the Middle East.

He said Mr Musharraf was "a person with whom I've worked very closely over the past four years, a person with whom I look forward to working closely over the next four years".

Mr Bush said he assured the Pakistani president the creation of a Palestinian state would be a priority of his administration. "The goal is two states living side-by-side in peace and security," he added.

BILATERAL TIES: Mr Bush said Mr Musharraf and he also discussed bilateral relations and "the relationship between India and Pakistan".

"He (Gen Musharraf) has shown great courage in that relationship, leading toward what we hope will be a peaceful solution of what has been a historically difficult problem," the US president said.

"We talked about our own bilateral relations. The president and I are absolutely committed to fighting off the terrorists who would destroy life in Pakistan, or the United States, or anywhere else," said Mr Bush.

Addressing President Musharraf, the US president said: "And I appreciate very much your clear vision of the need for people of goodwill and hope to prevail over those who are willing to inflict death in order to achieve the predominance of an ideology that is just backward and dark in its view."

Mr Bush said the Pakistani president also raised the issue of bilateral trade and was "very concerned about whether or not Pakistani goods are being treated equally, fairly, as other goods coming into the United States".

"I listened very carefully to what he had to say. He had some constructive ideas as to how to deal with that situation."

Mr Bush said he reminded Mr Musharraf that he's doing "quite a good job" of making sure that the economy grows in Pakistan so that people got a chance to realize their dreams.

Assessing US-Pakistan ties, Mr Bush said: "All in all, our relationships are good, they're strong, and they will remain that way."

Responding to Mr Bush's remarks, President Musharraf said he had come to Washington basically to congratulate the US president for having won the elections and also for talks on "the enhancement of our bilateral relations, enhancement of our commercial ties with the United States".

Mr Bush disagreed with a perception that Pakistan is doing much more favours to the United States than it is getting in return.

COOPERATION: He said cooperation between Pakistan and the United States has been very strong but "friends don't sit there and have a score card that says, well, he did this, or he did that, and therefore, - there's a deficit". "Our relationship is much bigger than that. Our relationship is one where we work closely together for the common good of our own people and for the common good of the world."

Asked if the Pakistan Army has downgraded the search for Osama bin Laden, Mr Bush said: "Quite the contrary. The (Pakistan) army has been incredibly active and very brave in southern Waziristan, flushing out an enemy that had thought they had found safe haven."

He noted that the Pakistan army has suffered casualty, and for that, we want to thank their loved ones for the sacrifice that their family has made.

Mr Bush said Gen Musharraf has been a determined leader to bring to justice not only people like Osama bin Laden, but to bring to justice those who would inflict harm and pain on his own people.

"Remember, this is a man whose life had been threatened by, and still is threatened by Al Qaeda leadership. He's the person who survived two direct assassination attempts. And there is nobody more dedicated in the protection of his own people than President Musharraf."

He said he was very pleased with Gen Musharraf's focused efforts, and their discussions today were to determine how best they could help the Pakistani president achieve his objective. Asked how he would define the long-term vision he has for ties with Pakistan, Mr Bush said it's a relationship which was very mature in this sense. "That there is a commercial relationship which is fair and balanced, mutually beneficial to both people; a defence relationship which is one in which there is close collaboration and complementary efforts based upon the true threats of the 21st century."

PALESTINE: "And thirdly, there's a relationship in which I can call upon my friend to help deal with international issues, such as the development of a Palestinian state, one in which the aspirations of the Palestinian people are met and listened to, because democracy has taken hold."

He said some in the world do not believe that a Muslim society can self-govern but "the Pakistan people have proven that those cynics are wrong".

President Musharraf, he said, can help in world peace by reminding the sceptics what's possible. He said for resolving the Palestinian dispute, "a world effort" is needed. A future Palestinian state, he said, needs to have an independent judiciary, a civil society that has the capacity to fight terrorism and allows for dissent.

"And President Musharraf can play a big role in helping achieve that objective," he added. "None of us can make the Palestinians adhere to this point of view, but we can help convince them."

He said he looks forward to working with this world leader (Mr Musharraf) on that important issue.

The meeting between the two leaders began at 9am, shortly after Mr Musharraf pulled up on the south driveway of the White House and after the meeting Mr Bush told a briefing that the talks "focused heavily" on the Palestinian issue.

Mr Bush then took four questions, two from American and two from Pakistani journalists, "in the spirit of Saturday morning meetings," he said jokingly. President Musharraf kept his hands clasped in his lap almost exclusively throughout the event.

Mr Bush gestured freely and joked about forcing the media pool to work on Saturday and advised Mr Musharraf not to take press questions.

The two presidents sat side by side in front of the unlit fireplace. Both of them wore lapel pins of their nation's flag. Next to Mr Bush on the other side of the Oval desk were Vice-President Dick Cheney, Secretary of State-designate Condoleezza Rice, Secretary of State Colin Powell and Defence Secretary Donald Rumsfeld.

Later, Foreign Minister Mehmood Kasuri pointed out that the vice-president does not usually attend such meetings but his presence showed the respect the Bush administration shows to him.

After the summit, President Musharraf had a separate meeting with Mr Powell and invited him to visit Pakistan after his retirement.