Five years ago, President George Bush issued a clarion call for a new Palestinian leadership not tainted by terrorism. His speech yesterday did not quite match the previous address in its courage, creativity, and moral clarity, but it made some important steps in the right direction. The clearest part of the speech was its rejection of Hamas's "lawless and violent takeover." Bush continued: "The alternatives before the Palestinian people are stark. There is the vision of Hamas, which the world saw in Gaza - with murderers in black masks, summary executions, and men thrown to their death from rooftops. By following this path, the Palestinian people would guarantee chaos, and ... surrender their future to Hamas's foreign sponsors in Syria and Iran. And they would crush the possibility of a Palestinian state." Bush described the positive contrast potentially offered in the West Bank. Then he said: "Only the Palestinians can decide which of these courses to pursue. Yet all responsible nations have a duty to help clarify the way forward. By supporting the reforms of President Abbas and Prime Minister Fayad, we can help them show the world what a Palestinian state would look like - and act like. We can help them prove to the world, the region, and Israel that a Palestinian state would be a partner - not a danger." Bush pledged $190 million in aid to the Palestinians, plus another $80m. "to help Palestinians reform their security services." Assistance will come "once a plan to build Palestinian institutions is in place." And Quartet envoy Tony Blair has been tasked with keeping an eye on this institution-building process. In other words, the Palestinians will have a lot of financial incentives and outside supervision to steer them toward doing the right thing. This, however, was ostensibly the case all along since 1993, and we have all seen how the situation has unraveled. Palestinians have become more violent and radicalized, and the two-state plan seems, in some senses, further than ever from fruition - despite increasing Israeli support for it. This is where Bush is suggesting bringing in a new element: the Arab states. Until now, the Arab states have had a free ride. Israel and the international community have shouldered almost the entire financial and diplomatic burden of pushing the Palestinians toward peace, while the Arab states have sat back at best, and allowed the fomenting of radicalism, anti-Semitism, and rejectionism at worst. "Arab states," Bush said, "have a pivotal role to play ... They should show unequivocal support for President Abbas's government - and reject the violent extremists of Hamas. ... Arab nations should also take an active part in promoting peace negotiations. "Relaunching the Arab League initiative was a welcome first step. Now Arab nations should build on this initiative - by ending the fiction that Israel does not exist, stopping the incitement of hatred in their official media, and sending cabinet-level visitors to Israel. With all these steps, today's Arab leaders can show themselves to be the equals of peacemakers like Anwar Sadat and King Hussein of Jordan." This is an important new feeler in the right direction, and should not be allowed to end as a footnote to one speech. The Arab states could do much more, and the US should say so before the regional summit Bush has called for in a few months. Bush said that Israel "should be confident that the United States will never abandon its commitment to the security of Israel as a Jewish state and homeland for the Jewish people." This is code for the US opposing a Palestinian "right of return" to Israel, rather than to Palestine. But why use code? Why not say this clearly? And even more importantly, why not call the Arab states who claim to support peace to say it? It is difficult to promote peace without speaking clearly about the key obstacle to peace. There is no greater obstacle to peace than the Palestinian demand to demographically overrun Israel, which is an obvious back-door attempt to destroy Israel and deny our right to exist. Abandoning this demand is the Palestinian equivalent of Israeli acceptance of a Palestinian state: together they are the sine qua non of the two-state solution. Yet while there has been no shyness to press Israel on Palestinian statehood, and that pressure has been dazzlingly effective, the West - even the US - is still in code stage regarding the "right of return." This needs to change. The best way the US, Europe and the Arab states could help Palestinians escape their radicalization spiral is to take the wind out of the radical dream of Israel's destruction. This can be done by saying explicitly that Palestine and the Arab states, not Israel, are the solution to the refugee problem.