"Extremists do not want a Palestinian state," said US President George W. Bush during a joint press conference with British Prime Minister Tony Blair on Thursday. Bush added that the British prime minister would be traveling to the Middle East in order to help the Israelis and the Palestinians overcome "the obstacles standing before the aim of both nations, which he said was: "Two states living in peace side by side." Bush stressed that the Palestinians did not yet have a unity government that adhered to the conditions of the international Quartet. Blair reiterated Bush's comments, lamenting that it had not been possible to achieve a PA unity government which was committed to the principles of the international community. "The major difficulty is that the Palestinians don't accept Israel's right to exist," added Blair. "We will release money to the Palestinian Authority and take the peace process forward, but we need a government on both sides committed to the basic principles," he continued. "We need to get the door unlocked," said Blair. "It is barred at the moment and we need to get it opened". Bush asserted that success in Iraq depended on victory over extremists across the "broader Middle East." "It's a tough time and its a difficult moment for America and Great Britain and the task before us is daunting," Bush said a day after a bipartisan commission said his war policies have failed and called for a change in strategy. The president acknowledged that, "It's bad in Iraq." Bush said that a bipartisan panel's call for a major change of course in Iraq was an important document, but just one of several reports he will consider as he charts a new strategy. The two leaders met a day after the Iraq Study Group headed by former Secretary of State James A. Baker III and former Democratic Rep. Lee Hamilton issued a report saying their war policies had failed and a major course correction was needed, including beginning to withdraw combat troops. Blair said the report "offers a strong way forward. I think it is important now we concentrate on the elements that are necessary to make sure that we succeed -- because the consequences of failure are severe." Asked at a joint news conference when the president would start to carry out recommendations for a change, Bush noted that other studies were still under way by the Pentagon, the State Department and the White House National Security Council. He said he would make major policy decisions "after I get the reports" He called the Baker-Hamilton report "certainly an important part of our deliberations and an important part of our discussions this morning." At the same time, Bush said, "I don't think Jim Baker and Lee Hamilton expect us to accept every recommendation." Baker did say, earlier Thursday, he believes the study "is probably the only bipartisan report he's going to get and it's extremely important that we approach this issue in a bipartisan way." The report, which contains 79 separate recommendations, says that Bush's Iraq policy is not working, warns the situation in Iraq is "grave and deteriorating" and calls for most US combat troops to be withdrawn by early 2008.