Aznar and Blair were firm allies over the Iraq war

Speaking after talks in Downing Street - which included a conference call with George W Bush - they welcomed news that progress was being made by new Palestinian prime minister Mahmoud Abbas.

"We are delighted that the Palestinian cabinet is agreed under Prime Minister Mahmoud Abbas," said Mr Blair.

"There is now every chance we can make progress in the Middle East."

The breakthrough had cleared the way for the publication of the "road map" for Middle East peace.

Mr Blair also said that the talks covered the current and future situations in Iraq.

'Courage'

He said the Iraqi people were already enjoying freedoms unlike they had seen for 30 years.

Mr Blair paid tribute to Mr Aznar's "courage and leadership" in joining the coalition against Iraq.

The UK prime minister stressed the benefits that the removal of Saddam Hussein's regime already being felt in Iraq.

He said the dictator had been responsible for thousands of deaths among his own people and that the regime's opponents had been routinely tortured.

Mr Aznar, standing side-by-side with Mr Blair at a Downing Street news conference, also had warm words for the British premier.

During a phone conference both European premiers and Mr Bush agreed there was a world-wide commitment to creating a two state solution of a viable Palestine alongside a secure Israel.

Mr Aznar was Mr Blair's principal European ally over the Iraq war and the visit is widely seen as a public display of that friendship.

Strong rivalry may erupt, however, when the two football fans watch the crunch Real Madrid v Manchester United Champions League tie together after they have dinner.

Their meeting comes after France made a surprise call for sanctions against Iraq to be lifted.

The sanctions had been tipped as a potential sticking point at the United Nations before the French announcement on Tuesday.

UK Government officials have responded cautiously to the proposal, saying they look forward to seeing the details.

Complex issues

Mr Aznar may be able to update Mr Blair further on French plans as his London visit follows talks in Paris with French premier Jean Pierre Rafarin.

On Wednesday, Mr Blair's spokesman said: "We do want to see sanctions lifted because of the changed situation.

"But the best way to do that is through discussions at the UN, because there are complex dove-tailing, sequencing issues, how it works with the oil for food programme."

Mr Aznar's discussions in Paris focused around the Middle East peace process, which Mr Blair has also been working at.

The UK prime minister telephoned Palestinian leader Yasser Arafat on Tuesday, saying that everything possible should be done to ensure Mahmoud Abbas became prime minister.