RIYADH, 9 October — Custodian of the Two Holy Mosques King Fahd yesterday welcomed US President George W. Bush’s statement on a Palestinian state, and called for practical steps to end the Arab-Israeli conflict and establish peace in the region.

“King Fahd considers the statement a positive step, and hopes it will be followed by practical steps that would put an end to the conflict and achieve peace in the region,” Information Minister Dr. Fuad Al-Farsi told the Saudi Press Agency.

Bush last Tuesday told reporters: “The idea of a Palestinian state has always been part of a US vision for Middle East peace, so long as the right to Israel to exist is respected.”

Addressing the weekly Cabinet meeting, King Fahd underlined the efforts made by Saudi Arabia to bring about a change in US policy in favor of the Palestinian issue.

The meeting called for the lifting of an Israeli economic blockade on the Palestinian people.

The Cabinet also called on the international community to end the suffering of the Palestinian people in the occupied territories and establish a just and comprehensive peace on the basis of UN Security Council resolutions.

In the light of a proposal made by Petroleum and Mineral Affairs Minister Ali Al-Naimi, the Cabinet granted the Maaden company the license to exploit gold ore and associated minerals in Balgha area under the Madinah region. The license, which covers 39 square kilometers, is given for 25 years.

The meeting authorized the head of the Presidency of Civil Aviation to sign an agreement with Eritrea on air transport services.

It appointed the foreign minister to hold talks with German officials on reorganizing Saudi and German schools and teachers in both countries.

The Cabinet appointed Abdul Kareem ibn Salim Al-Harbi as undersecretary in the Madinah governorate.