"Extremists do not want a Palestinian state," US President George W. Bush said 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." That aim, Bush said, was "two states living in peace side by side." Blair said he would seek progress toward the release of kidnapped Israeli soldier Gilad Shalit, who is being held in Gaza, and thus the release of many Palestinian prisoners. 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," he said. "We will release money to the Palestinian Authority and take the peace process forward, but [first] 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." The two leaders met to discuss developments in Iraq, a day after the Iraq Study Group headed by former secretary of state James Baker and former Democratic congressman Lee Hamilton issued a stinging report saying the Bush policies in Iraq had failed and a major course correction was needed, including beginning to withdraw combat troops. Bush, admitting that "it's bad in Iraq," acknowledged that the US needed a new approach to the unpopular war and promised to unveil details in an upcoming speech. Bush said he was disappointed in the progress in Iraq, but continued to oppose direct US talks with Iran or Syria and remained steadfastly committed to spreading democracy across the Middle East. "I do know that we have not succeeded as fast as we wanted to succeed," Bush said, standing alongside Blair. "I do understand that process is not as rapid as I had hoped." Blair said he welcomed the Iraq Study Group report despite its depiction of a failed policy that both he and Bush had previously embraced. "It 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," Blair said. Bush said the report would be an important part of his considerations. He said he was awaiting results of internal reviews under way at the Pentagon, State Department and the White House and would deliver a speech to the nation on Iraq in coming weeks after he decided on a new course. The study group concluded that a stable, democratic Iraq was still possible, but Baker said, "We do not know if it can be turned around." Bush was more upbeat, but gave no hints about whether he was contemplating a major policy shift. At the same time, he said he didn't think Baker and Hamilton "expect us to accept every recommendation." "It makes sense to analyze the situation and to devise a set of tactics and strategies to achieve the objective that I have stated," Bush said. "And so, if the present situation needs to be changed, it follows that we'll change it if we want to succeed." Both Bush and Blair said supporting the government of Iraqi Prime Minister Nouri al-Maliki was central to efforts to help Iraq defend, govern and sustain itself. They both urged Maliki to do more to assert control and quell violence. Bush was asked whether he thought the study group suggested that he did not appreciate the extent of the violence in Iraq. "It's bad in Iraq. That help?" he retorted. "You know, in all due respect, I've been saying it a lot," Bush continued. "I understand how tough it is and have been telling the American people how tough it is. And they know how tough it is." Bush appeared to endorse the bipartisan panel's conclusion that any resolution to the Iraq conflict was tied to reducing tensions between Israel and the Palestinians and across the broader Middle East - a position Blair has already endorsed. "It's a tough time and it's a difficult moment for America and Great Britain and the task before us is daunting," Bush said as members of the panel testified about their report in Congress.