In a landmark speech on June 24, President George W. Bush signaled that the United States was no longer willing to recognize the leadership of Yasser Arafat as effective in efforts to secure peace in the Arab-Israeli conflict. The President condemned Palestinian authorities for "encouraging, not opposing, terrorism" and called on the Palestinian people "to elect new leaders, leaders not compromised by terror."

In the eyes of the Bush Administration, Chairman Arafat has been a monumental failure as leader of the Palestinian people and a huge disappointment to the international community. Instead of promoting peace and economic reform, Arafat's Palestinian Authority has supported terrorist organizations and actions and fostered an environment of conflict, fear, intimidation, and poverty in which the rule of law is nonexistent and corruption is endemic.

President Bush's speech, combined with reports of U.S. plans to take military action against Iraq, has evoked strong opposition in Europe. Members of the European Commission joined leaders of the United Nations and Russia in vociferously rejecting the President's Middle East policy. Regardless of Arafat's connections with terrorism, Europeans continue to assert that they would continue to deal with Arafat if he were to win the presidential election in January. The European Union believes there can be no talk of an Iraq war until peace has been brought to the Middle East. These reactions bring into sharp focus the widening gulf between the United States and the EU over a wide range of key foreign policy issues.

President Bush at this time must keep the focus of the country firmly on the war against terrorism and continue planning for U.S.-U.K. military action against Iraq. He must not let the Arab-Israeli conflict distract him from the main goal of defeating al-Qaeda and extending the war against terrorism to rogue states that threaten regional and global security. America must avoid getting bogged down in a Middle East peace process and focus instead on the wider war against global terrorism.

Specifically, the Administration should:

• Call on the European Union to halt direct funding for the Palestinian Authority until elections have been held and there has been a change of leadership.
  EU funds should be reallocated as humanitarian aid funneled through non-governmental organizations to make clear to the world that it supports the people of Palestine and not a leadership that refuses to crack down on terrorism. The United States should call for an independent audit commission to examine allegations that EU aid has been used to fund Palestinian terrorist groups.
  
  
• Hold firm on isolating Arafat and supporting Israeli Prime Minister Ariel Sharon in his efforts to prevent further suicide bombings by Palestinian militants.
  The recent increase in suicide bombings in the Middle East demonstrates Arafat's inability and insincerity in securing a peaceful solution to the conflict.
  
  
• Oppose EU attempts to break the resolve of the U.S.-U.K. "special relationship" and forge ahead with action to oust Saddam.
  Prime Minister Tony Blair and President Bush are expected to hold a war summit in the fall to finalize plans for an assault on Baghdad. Talk of a Bush-Blair rift over the Palestinian question is exaggerated. While there undoubtedly are policy differences between the two leaders, there is a great deal of common ground on the Middle East question.
  
  
• Make clear that a war against Iraq is not contingent on peaceful resolution of the Arab-Israeli conflict.
  The EU will press the United States to desist from striking Iraq until there is a resolution of the Israeli-Palestinian dispute. The Administration needs to emphasize that these are issues that involve very distinct levels of threat to U.S. and global security, and that the surest way to bring about long-term peace and security in the Middle East is to bring about a regime change in Baghdad.
  
  
• Resist calls from Europeans to establish an international peacekeeping force in the West Bank.
  Such a force would likely exacerbate the tensions and, if manned by pro-Palestinian European countries, could be heavily weighted against the interests of Israel, seriously hampering Israel's efforts to stamp out terrorism.

Conclusion.
The European Commission and the European Parliament in recent months have displayed an overwhelming anti-Israel bias and a visceral hatred for the leadership of Ariel Sharon. Israel has become a pariah nation in the eyes of many EU politicians. The overtly anti-Israeli rhetoric of the European Union, combined with the EU's huge financial investment in the Palestinian Authority, suggests that the EU cannot be seen as an honest broker in the current Middle East crisis. This raises serious doubts over the neutrality of the European Union in any future peace efforts in the region.

European hostility toward Israel also reflects deep-seated resentments within the EU's ruling elite toward U.S. global power. For many in Europe, support for the Palestinian Authority (and opposition to a war with Iraq) is an important symbolic gesture of defiance against the Bush Administration's foreign policy. After months of being sidelined in the war against terrorism following the September 11 attacks, the European Union is keen to be seen flexing its muscles in a region where it believes it has political and economic influence.

The Bush Administration must remain firm in dealing with the EU's objections and continue displaying its clear leadership in the war on terrorism. The United States should work closely with its strongest ally, Great Britain, on the Middle East and not allow disagreements with the EU over Palestine to deflect consideration of military action to address Iraq's growing threat to peace.

Dr. Nile Gardiner is a Visiting Fellow in Anglo-American Security Policy in the Kathryn and Shelby Cullom Davis Institute for International Studies at The Heritage Foundation.