U.S. President George W. Bush is optimistic Israelis and Palestinians can reach an agreement before he leaves office in a year's time, Bush said in a newspaper interview published Friday ahead of his arrival in the region next week.

U.S. President George W. Bush is optimistic Israelis and Palestinians can reach an agreement before he leaves office in a year's time, Bush said in a newspaper interview published Friday ahead of his arrival in the region next week.

Bush also said he plans to use his time in the Mideast to rally opposition to Iran's nuclear program, saying a recent U.S. intelligence report that said Iran had suspended its program didn't mean the danger was over.

The interview was published Friday, in Hebrew, in the Israeli mass-circulation daily Yediot Ahronot.

Israelis and Palestinians relaunched peace talks at a U.S.-hosted Mideast conference in November, and both Israel's prime minister, Ehud Olmert, and Palestinian President Mahmoud Abbas have said they hope to reach a final peace agreement by the end of 2008. Polls have shown large majorities of Israelis and Palestinians skeptical of that target date, but Bush said he thought it remains realistic.

"I believe. I'm an optimistic guy," Bush told the Yediot correspondents, who interviewed him at the White House Wednesday.

Israel and the Palestinians will have to agree on what exactly a Palestinian state will look like, Bush said, adding during his visit he will reassure Israeli leaders Israel won't have to live beside a Palestinian neighbor dedicated to its destruction.

"I'm going to promise the Israelis that under no circumstances will Israeli democracy be forced to live with a terror state on its border," Bush said.

But Bush also said Israel had to uphold its own commitments, including removing Jewish settlement outposts in the West Bank.

"The Israeli government announced that it plans to get rid of the unauthorized outposts, and that's what we expect them to do," Bush said. "We expect the Israeli government to honor its commitments."

Settlers have erected more than 100 such outposts in the West Bank, in violation of Israeli law but with the tacit or active support of Israeli authorities. Bush said he would raise the issue in his talks with Israeli leaders.

As part of the renewal of peace talks, Israel repeated its commitment to dismantle the outposts and not expand settlements in the West Bank, territory Israel captured in 1967 and which the Palestinians want for a state, along with the Gaza Strip and east Jerusalem.

Bush will arrive in Israel Jan. 9 and will also visit the West Bank, Kuwait, Bahrain, the United Arab Emirates, Saudi Arabia and Egypt. There has been speculation he will also visit Lebanon and Iraq, but the White House hasn't confirmed that.

Bush said he would use his time in the Mideast to "make very clear" to countries there the U.S. still views Iran as a threat.

The president insisted a recent U.S. intelligence report saying Iran halted its nuclear weapons program in 2003 "does not in any way detract from that threat, but in fact makes clear the size of the threat."