President Bush set a goal yesterday of ensuring the creation of a peaceful, democratic Palestinian state alongside Israel before he leaves office in 2009. With British Prime Minister Tony Blair at his side, Bush pledged to put the resources of the United States and the prestige of his presidency behind the quest.

"I'd like to see it done in four years," Bush said. "I think it is possible."

Bush, aiming to mend transatlantic ties that were frayed over Iraq, announced that the first foreign trip of his new term will be to Europe.

The president and the prime minister said the death of Palestinian leader Yasser Arafat, who was buried three hours before they spoke, provided a promising new chance for achieving what Bush called "a just and peaceful resolution of the Arab-Israeli conflict based on two democratic states -- Israel and Palestine."

"I believe we've got a great chance to establish a Palestinian state, and I intend to use the next four years to spend the capital of the United States on such a state," Bush said in an East Room news conference with Blair, his closest ally. "I believe it is in the interest of the world that a truly free state develop."

Both leaders said they will use the next few months to mobilize global support for a Palestinian leadership committed to democratic reform and fighting terrorism.

The president's appearance with Blair, who has been prodding Bush to put more energy into Middle East overtures, opened an aggressive White House campaign to mend ties with Europe that were strained by the U.S.-British decision to invade Iraq over the opposition of some longtime allies.

Bush's trip to Europe is likely to be in February, aides said. He plans to visit the Brussels headquarters of NATO and the European Union, but his other stops were not announced.

The purpose of the trip, Bush said, is to "remind people that the world is better off, America is better off, Europe is better off when we work together."

Bush did not endorse any of the specific measures that Blair proposed -- including an international peace conference and the designation of a U.S. envoy to the Middle East -- but said he will do so if he believes they are practical.

"We'll do what it takes to get a peace," Bush said. "I'm all for conferences, just so long as the conferences produce something."

The White House has paid sporadic attention to the Middle East since the Sept. 11, 2001, terrorist attacks and the subsequent U.S. invasions of Afghanistan and Iraq. Optimistic rhetoric has been dashed before, administration by administration, by repeated waves of violence and fighting between Israelis and Palestinians. Bush originally set a goal of a Palestinian state by 2005.

Bush made no mention of his frequent contention that democracy in Iraq would set the stage for Middle East peace.

The president's news conference with Blair and a private lunch and dinner for the two leaders were part of a White House effort to transform Bush's image from reelection candidate to statesman.

Bush scowled when a British reporter asked about Blair's reputation among critics back home as the president's "poodle." But Blair laughed, and then Bush laughed, too, and gave an impassioned defense of his partner in the coalitions that attacked Iraq and Afghanistan.

"When he says something, he means it. He's a big thinker. He's got a clear vision. And when times get tough, he doesn't wilt," Bush said. "That's the kind of person I like to deal with. . . . I'm a lucky person, a lucky president, to be holding office at the same time this man holds the prime ministership."

Bush said the United States will let Palestinians decide on Arafat's successor without interference, noting that it is impossible for the United States or Britain to "impose our vision."

In the past, Bush has put much of the onus on the Palestinians to end terrorism and build political institutions. He made it clear yesterday that he still holds those expectations, Arafat's death notwithstanding.

"We'll hold their feet to the fire to make sure that democracy prevails, that there are free elections," he said.

Blair, who dined on smoked duck with Bush before flying back to London after a 24-hour stay, said Britain will do "whatever it takes." Blair said he will "work flat out to deliver" side-by-side states.

An administration official said later during a White House briefing that "in the post-reelection period, we wanted to very quickly send the message that we look forward to intense work with the Europeans."

"Some of that theme got drowned out in our own election cycle," the official said.

In a joint statement issued after the Bush-Blair meetings, the two countries said they had agreed to "mobilize international support" behind a plan to help build Palestinian economic, political and security institutions. While the U.S.-backed peace plan known as the "road map" focused on building such institutions, the notion of a broad international effort appears to be new. The statement said the plan "will be developed intensively over the coming period of time in concert with all the relevant partners."

After leaving the White House, Blair told ABC's "Nightline" that a key part of the plan is to make sure that international donations to the Palestinian Authority are used "for the good of the Palestinian people" and not diverted to secret bank accounts such as those that are said to have been used by Arafat.

The joint statement also appeared to play down the importance of the road map, or at least indicate flexibility in interpreting it. The statement said the road map will be used "as a reliable guide leading to final status negotiations."

An official said at the briefing that the U.S. wants Israel " to facilitate as needed the Palestinian elections."

Israeli officials said they were pleased by Bush's comments, especially because the president sidestepped a question on whether Israel should freeze growth in West Bank settlements. Though a settlement freeze is required in the road map, Bush replied: "I believe that the responsibility for peace is going to rest with the Palestinian people's desire to build a democracy and Israel's willingness to help them build a democracy."

Secretary of State Colin L. Powell later told al-Arabiya television: "The president's position on settlements is well known, and he wants to see the end of settlement activity."

In Bush's first term, the White House has only briefly engaged in resolving the Middle East conflict, only to step back repeatedly. Moreover, after President Bill Clinton failed to cinch a deal despite endless days of negotiations, Bush said he was not inclined to be so directly involved.

The one exception came when Bush attended a pair of summits on the Red Sea in June 2003, designed to give a boost to the road map. But the plan stalled when the Palestinian prime minister supported by Bush resigned three months later. The administration essentially disengaged again, except to support a plan by Israeli Prime Minister Ariel Sharon to unilaterally leave the Gaza Strip and a handful of settlements on the West Bank.

British Prime Minister Tony Blair and President Bush speak at the White House after discussing the Mideast.