Up to 4.5 million Mexicans are in the US illegally

The US Government has ruled out a blanket amnesty for the estimated 4.5 million Mexicans staying illegally in the United States.

Mr Bush has referred only to a possible guest worker programme.

Mr Bush welcomed President Fox, saying: "The United States has no more important relationship in the world than the one we have with Mexico."

And he added: "Some have described the century just passed as the American century. Now we look forward. We have a chance to build a century of the Americas, in which all our people, north and south, find the blessings of liberty."

Drugs collaboration

Mr Bush said both nations had to work together on key issues such as immigration and trade.

The two leaders also agreed to collaborate more closely on efforts to battle drug trafficking and crime.

Mexican First Lady Martha Fox (left) with US First Lady Laura Bush

Mr Bush said stronger trade relations between the two nations could be used as the foundation for a free trade zone reaching from Canada to Chile.

After the welcoming ceremony, both leaders went to the Oval Office for a joint cabinet meeting to be followed by a state dinner.

This is the first state visit of the Bush presidency, and one that has been carefully choreographed.

Immigration is one of the key issues on the agenda.

A barbed wire fence is all that separates the two countries and the US Border Patrol arrest up to 50,000 Mexican migrants a month in Southern Arizona alone.

Some believe up to five times as many are never caught.

At dusk, US oficers can see would-be immigrants just a few feet away, waiting for darkness for their dash to America.

Negotiations have been continuing for months to try to resolve the problem of Mexican illegal immigration.

Personal chemistry

The Mexican leader's visit is designed to show the new direction of President Bush's foreign policy, and his new emphasis on Latin America.

The two presidents are said to enjoy a good personal chemistry, and both need each other politically.

President Bush is eagerly trying to woo the Hispanic vote, while President Fox needs American help if his reform programme is to succeed.

Mr Bush said on Tuesday that good foreign policy began with America's neighbours like Mexico.