Blair meets Bush to discuss peace plan prospects

Tony Blair went into talks last night with President George Bush at his farm in Crawford, Texas to discuss hopes for a peace plan for a ceasefire in the Middle East.

The crisis will top the agenda for a further day of talks today at the 1,600-acre ranch, where they will be joined by the Prime Minister's wife, Cherie, who has been on holiday with their children in Miami.

The President's speech on Friday has made the visit easier for Mr Blair, who was faced with the difficult task of bridging the gap between growing European exasperation at the US inaction and support for the President in the "war against terrorism".

Mr Bush's decision to send his Secretary of State, Colin Powell, to the Middle East for a third attempt to broker a ceasefire was welcomed by Downing Street, and will lay the ground for Mr Bush and Mr Blair to exert further pressure on both sides in the conflict to end the violence.

Mr Blair's advisers avoided claiming credit for the US administration's volte face, which came after he talked to Mr Bush on the telephone.

Some of Mr Blair's ministers believe the rising price of oil is one of the key factors that forced Mr Bush into the U-turn over Israel's attacks on Palestinian camps. "The oil price is a huge weapon in the hands of the Arab countries," one minister said. "If it starts destabilising the world economic recovery, after 11 September, the Islamic world will use it as a weapon."

Lord Powell, the former foreign affairs adviser to Baroness Thatcher, also said the oil price hike was a factor in the US administration's reassessment of its Middle East policy.

Mr Blair is keenly aware that he faces a backbench revolt at home by his own MPs if he is seen to be giving unqualified support to US policy in the Middle East.

Mr Bush's change of attitude will take some of the heat out of protests that Labour MPs plan to make when parliament resumes next week over the failure to call an emergency Commons debate on the Middle East crisis.

But Downing Street made it clear as Mr Blair prepared for his trip that on key points he will not retreat from his support for the President. A dossier detailing alleged links between Iraq and international terrorists has been delayed, but Mr Blair's spokesman said the information will be released in the public domain "at the appropriate time". It is understood, however, that the report fails to provide the "smoking gun" required to link Saddam Hussein's regime to Osama bin Laden's al-Qa'ida terrorist network.

The threatened US attack on Iraq will be on the agenda for Mr Bush and Mr Blair, the Downing Street source said. Pressed on whether this would frustrate the search for peace in the Middle East, the Prime Minister's spokesman said: "Iraq is an issue that is not going to go away. You cannot put your head in the sand and pretend that weapons of mass destruction don't exist. They do."

There are divisions between Downing Street and the Foreign Office over whether military action against Iraq would require a fresh UN mandate through a new security resolution.

Sources close to Jack Straw, the Foreign Secretary, favour going back to the UN, but Mr Blair's advisers take a more hawkish view.

While hosting the Blairs, Mr Bush is expected to provide them with a taste of ranch-style living, with a barbecue and a bluegrass band among options for Saturday night.

The local radio station, Waco Radio, has been asking journalists in London whether Mr Blair is good on a horse, a question that has baffled them.

The Prime Minister will make a speech tomorrow and visit Prague on Monday for a meeting on EU enlargement before flying home for the Queen Mother's funeral on Tuesday.