By Paul Reynolds BBC News Online world affairs correspondent

Bush's government still believes in spreading democracy in the greater Middle East.

American proposals for promoting democracy and reform in the Greater Middle East have been toned down, but Washington is still hoping to get support for a version of them at the G8 summit.

At the same time, Nato, at its forthcoming summit in Istanbul on 28 June, is expected to endorse a strategy of reaching out to Middle East countries offering them military advice.

Originally, there was talk of a Helsinki-type declaration at G8 between 8-10 June, recalling the commitment to reform made by the Soviet Union and its allies in 1975. That was used by the West to hold communist governments accountable.

But, stung by problems in Iraq, by the intractability of the Israeli-Palestinian conflict and by criticism from the region and Europe, the emphasis now is far more on supporting reform movements within the Middle East itself.

An initial American working paper has given way to a new draft.

It says that the aim is "to maintain dialogue about economic and political reform with people in the region".

The use of the word "people" is significant. Governments are not the only points of contact.

Indeed in the Middle East, governments are often seen as part of the problem.

Ideas for democracy

The draft proposes five concrete ideas:

• A Greater Middle East forum for the future: to enable discussions to take place not just between government officials but ordinary citizens

• A democracy assistance group: this would support existing efforts by non-government organisations to foster democratic practices

• A foundation for democracy: a regional version of the US National Foundation for Democracy, which hands out grants to democracy activists worldwide

• A literacy group: to help tackle illiteracy in the region, one of its worst social problems

• A micro-finance project: to fund small businesses, but this is some way from the development bank proposed in the first draft which was seen as too ambitious

There are other proposals - many taken from the first draft - which call for help to be given to women's groups, the liberal media and trade unions, but they are not as detailed as the five core projects.

A British Foreign Office spokeswoman said that it was "worthy stuff with an eye to the future."

"We want this to be led by the region. It is based on an understanding that you have to work in partnership," she said.

The parallel Nato intitiative, being called the Istanbul Cooperative Initiative, aims to widen the contacts now underway with Central Asian countries to the Middle East, especially the Gulf states which traditionally have been close to the West.

Nato will offer advice on military structures and on reform.

The effort in the G8 document to reach out beyond governments in some ways mirrors the policy towards reform in Eastern Europe and the Soviet Union, in which support for dissidents was a key element.

Bridging the chasm?

Of course, in the Middle East, it is trickier in that some of the governments - Saudi Arabia and Egypt for example - are US allies.

It is quite ambitious and in the current climate everyone will say something polite; the US has regrouped and has not abandoned its ideas, but I would be surprised if much substance came out of G8 Rosemary Hollis Royal Institute for International Affairs

Both have refused invitations to join the G8 discussions.

The problem of who to deal with was highlighted this month in an article for the Brookings Institution by Tamara Cofman Wittes of the Saban Center for Middle East Policy.

"The United States and the G8, as a whole, have managed to avoid a central question in their quest to build a 'partnership' for Arab reform: with whom do they seek to partner?" she asked.

She also said that, because of differences over Iraq and the Israeli-Palestinian conflict, the initiative might not bridge the "chasm" between the US and some European countries but instead widen it.

Some Middle East watchers question whether the plan amounts to much.

Rosemary Hollis of the Royal Institute for International Affairs in London commented: "It is quite ambitious and in the current climate everyone will say something polite."

"The US has regrouped and has not abandoned its ideas but I would be surprised if much substance came out of G8."

EU scepticism

The EU has been sceptical because it already has an initiative of its own - launched in Barcelona in 1995, based on country-by-country agreements to encourage reform.

Problems in Iraq have hampered US plans for Middle East reform

It has also more recently been speaking of developing a "neighbourhood" policy which adopts an encouraging, not critical, approach.

Nor do the Europeans, or the Arab countries, like the definition of the Greater Middle East which, in the US view, stretches all the way from Mauritania in West Africa to Pakistan.

European countries also shy away from the word "democratisation".

British Foreign Office Minister Baroness Symons wrote an article for an Arab newspaper on 20 May and did not use the word at all.

Instead she spoke about the need for "development and modernisation".

The Arab League at its recent meeting in Tunis issued a rather declaratory statement calling for reform, but left it to individual countries to choose their method and pace of change.

The message, basically, was not to interfere.

'Patience'

Rime Allaf of the Royal Institute of International Affairs said of the American approach: "The Americans are now softening their tone and speaking of partnership."

But there is now an effort by the neo-conservatives to throw the blame back into the Middle East for its own problems.

"They seek to explain the failure in Iraq with a mea culpa which blames everyone else. That is a very colonial way of doing things," she added.

The Bush administration still believes in the concept of spreading democracy in the Greater Middle East.

But instead of saying, as US President George W Bush did in London last November, that "it is not realism to suppose the one fifth of humanity is unsuited to liberty", the comments now are more like those made in March by the under-secretary for political affairs, Marc Grossman.

He put it this way: "This is not about the United States or Europe or anyone else imposing reform on people. The best ideas will come from the region."