It is Ms Rice's second visit to the region since taking office

Ms Rice praised the president for the steps already taken towards security reform, but said it was insufficient.

"Much more needs to be done particularly to actively use the security forces to combat lawlessness, and to combat terrorism," she said.

Ms Rice was speaking after talks with the Palestinian leader in Ramallah.

Withdrawal plan

Ms Rice is on the first leg of a two-day regional tour aimed at boosting the peace process between Israel and the Palestinians.

She will also hold talks with Israeli Prime Minister Ariel Sharon before travelling to Saudi Arabia, Egypt and Jordan to discuss democratic reforms.

DISENGAGEMENT PLANS 8,000 settlers to be withdrawn from Gaza Four small West Bank settlements to be given up Scheduled to start in mid-August and take eight weeks Uprooted settlers to receive compensation Q&A: Withdrawal plan Analysis: Rice's hopes

The talks come as preparations begin for the Israeli withdrawal from the Gaza Strip in August.

Ms Rice said that the withdrawal represented the best chance for re-energising the stalled roadmap peace plan.

The internationally backed roadmap, which was adopted in 2003, calls for the creation of a Palestinian state by the end of the year.

However, Ms Rice emphasised that much as the withdrawal provided an opportunity, it calls for real effort from both the Palestinians and Israelis:

"Both parties will have to do their parts if this is to be a peaceful and orderly withdrawal from Gaza," Ms Rice said.

For his part Mr Abbas said he had assured Ms Rice that the Palestinians were ready to work with Israel to ensure the withdrawal is a success:

"We have spoken of our commitment to reforms and peace, and we are totally committed to fully coordinate (with Israel) for a total and clean withdrawal from Gaza and the West Bank," Mr Abbas said.

Electoral law approved

Also on Saturday members of the Palestinian parliament in Ramallah passed a compromise law, paving the way for new legislative elections.

The elections had been due to take place in July, but earlier this month they were postponed indefinitely by the Palestinian leader, Mahmoud Abbas because of a dispute over how candidates would be selected.

Under the new law, half the members of parliament will be chosen by districts and half from party lists.

The decision to postpone the elections was strongly criticised by the militant group, Hamas, which accused Mr Abbas of playing for time.