Arab governments have given a broadly favourable response to President Bush's blueprint for peace in the Middle East.

Egyptian President Hosni Mubarak, described the speech as balanced.

He did not appear to accept the widely-held view that it implicitly called for Yasser Arafat to be replaced - although Mr Bush did not refer to the Palestinian leader by name.

An early international conference... is more than ever necessary

EU foreign policy chief Javier Solana

"I do not see in this speech the removal of Arafat, but a demand for reforms of the Palestinian Authority and the formation of a new administration," Mr Mubarak said.

He added that Egypt was willing to help restructure Palestinian institutions.

Jordan's Government issued a statement welcoming Mr Bush's speech, and saying Amman was ready to work with Washington to end the Israeli-Arab conflict.

And Arab League Secretary General Amr Moussa said Mr Bush's proposals deserved careful consideration.

In the rest of the world, reactions to the speech have been mixed.

Iran said it was a repetition of Washington's "hard-line and one-sided" position towards the Middle East.

Yasser Arafat has support in the Arab world

The European Union, for its part, welcomed the speech as a sign of renewed American engagement in the Middle East.

EU foreign policy chief Javier Solana said an international conference on the Middle East was "more than ever necessary".

However, in a carefully worded statement, Mr Solana avoided any explicit reference to Mr Arafat.

German Foreign Minister Joschka Fischer praised Mr Bush for making a "clear commitment" to peace in the region.

Mr Fischer made no direct reference to Mr Arafat either, but said: "The Palestinian people alone will decide who is their legitimate leader."

French Foreign Minister Dominique de Villepin - who met the Palestinian leader in Ramallah on Tuesday - has said Mr Bush's announcement "converges with the aims of France and the European Union".

But he added that it "was up to the Palestinians to choose their own leaders".

In Japan, Foreign Minister Yoriko Kawaguchi welcomed Mr Bush's plans for elections and a provisional Palestinian state - adding that "Palestinian people should decide on their own" who their leader is.

In Beijing, Chinese foreign ministry spokesman Liu Jianchao welcomed "the efforts by the US presidents to promote peace" - but said Mr Arafat's status as an elected leader was "an internationally recognised fact".

United Nations Secretary General Kofi Annan praised Mr Bush's vision of a Palestinian state side by side with a secure Israel.

However he too said Mr Arafat was a legitimate leader.

"President Arafat was chosen freely by the Palestinian people in elections that were widely welcomed by the international community in 1996," Mr Annan's spokesman Fred Eckhard said.

"He remains their leader and it will be up to them to decide through fresh elections already announced who will lead them in the future."