RAMALLAH, West Bank (Reuters) - Palestinian officials rejected any removal of President Yasser Arafat as a condition for statehood, as proposed on Monday by U.S. President George Bush in a speech scripting a path to Middle East peace.

"Palestinian leaders don't come from parachutes from Washington or from anywhere else. Palestinian leaders are elected directly by the Palestinian people. President Yasser Arafat was directly elected in a free and fair election," cabinet minister and chief negotiator Saeb Erekat told CNN.

"The world and President Bush must respect the democratic choice of the Palestinian people."

Bush, in a long anticipated address charting a roadmap to Middle East peace, told Palestinians they must elect a new leadership "not compromised by terror" to win an independent state in the West Bank and Gaza Strip.

"Terror" referred to suicide bombings by Palestinian militants that have killed scores of Israelis during a 21-month-old uprising against occupation in territory captured by Israel in the 1967 Middle East war.

Palestinian Information Minister Yasser Abed Rabbo said the Palestinian Authority leadership welcomed the ideas in Bush's speech and called for more detail.

He also said international intervention to make Israel withdraw from Palestinian towns was necessary to carry out democratic reforms and elections considered essential by Israel and the United States for Palestinian statehood.

Bush said a halt to Jewish settlement building in the Palestinian territories was necessary to lend momentum to a peace accord.

The Israeli government had no immediate reaction to his speech.

Quoted:
R-James Inhoff, Ok, Said this morning on the local news here, that he thinks, "This is Bush's last attempt." after that he said he thinks Bush will tell the Israelies they can now take care of their problem.

Ben