WASHINGTON/ WEST BANK, 14 May — US President George W. Bush held fast yesterday to his support of a Palestinian state, possibly foreshadowing a sharp dispute with Israel and its dominant Likud party.

In West Bank, Palestinian leader Yasser Arafat reassured his people they would win their own state, brushing aside the Israeli ruling party vow never to allow it. The hard-line coalition voted Sunday in favor of a resolution never to allow the creation of a Palestinian state, defying Prime Minister Ariel Sharon who had said he could support statehood under certain limited conditions.

"The president continues to believe that the best route to peace is through the creation of the state of Palestine and side by side security with Israel," White House spokesman Ari Fleischer said in response to Likud’s decision.

Arafat who toured the West Bank areas devastated by Israeli incursions yesterday said in Nablus: "To Jerusalem we are headed. Jerusalem is the capital of our independent state of Palestine, never mind who agrees or does not."

Several countries expressed fears the vote late Sunday by the central committee of Sharon’s Likud party could cut his margin for maneuver and derail a new round of Middle East diplomacy.

Countries around the Middle East also expressed concern about the impact of the Likud vote, which Jordanian government spokesman Mohammad Adwan said "constitutes an attempt to torpedo the peace process."

The Arab world was upset by the Likud decision. The vote, senior Palestinian negotiator Saeb Erekat told The Associated Press, "just shows that the war being waged by Israel against the Palestinians is not a war against what they call terror. It’s really their war to maintain the occupation of the West Bank and Gaza."

Erekat said the vote was "a real slap in the face" for Bush. Arafat seeks a Palestinian state with Jerusalem as its capital.

He also seeks the right to relocate millions of Palestinians in what would remain of Israel on the grounds they are descendants of Palestinians forced to flee during the establishment of Israel in 1947-48.

The European Union’s Spanish presidency was also critical of the Likud vote. "It is a pity," Spanish Foreign Minister Josep Pique said, "because all of us know the only solution to this conflict is to create a Palestinian state that is viable."

But other leaders said Likud was only one member of a coalition government and its vote had little effect. "The decision has no value. It’s just domestic election-related politics," said Egyptian Foreign Minister Ahmed Maher.

The Likud vote at a heated convention in Tel Aviv on Sunday marked a victory for former Israeli Prime Minister Benjamin Netanyahu over the incumbent Sharon in a looming battle for the party leadership.

US Secretary of State Colin Powell said en route to a NATO foreign ministers’ meeting in Iceland that he had spoken to Sharon earlier yesterday and "he reaffirmed to me that he remains committed to moving forward to achieve that vision that I think most people have of a Palestinian state".

Meanwhile, Arafat left his base yesterday for the first time in five months to tour battered West Bank towns. Arafat took a Jordanian helicopter to Bethlehem, Jenin and Nablus to inspect damage from Israel’s recent offensive in his first outing since the May 2 lifting of a siege on his Ramallah headquarters.

But he was forced to drop a visit to the devastated refugee camp in Jenin, the scene last month of the heaviest fighting in the Israeli drive, as rowdy crowds threatened to spill out of control.

Earlier, 1,000 supporters crowded into Bethlehem’s Manger Square to welcome Arafat at the Church of the Nativity.

In another development, Israeli security forces said they killed two Palestinians in two incidents in West Bank before dawn.

A Palestinian teenager critically wounded by Israeli troops during a raid of the southern Gaza Strip last week died of his wounds, Palestinian hospital sources said yesterday.

Palestinian Minister for Non-governmental Organizations Hassan Asfour and his bodyguard were beaten by masked men last night in the West Bank city of Ramallah, Asfour’s wife told AFP. The incident happened near Asfour’s home, she said. The minister was taken to the hospital for treatment, she said, without giving further details.

Arafat in an interview to CNN said he was prepared to accept an Israeli Jewish state side by side with a Palestinian state. "We hope that we will have this independent Palestinian state side by side with Israeli Jewish State," said Arafat.

He said the Palestinian activists carrying out attacks in Israel were supported by foreign powers. Asked in the interview if he would do everything possible to stop bombers, Arafat said: "No doubt. This is my policy from the beginning. Although, there are some — I don’t want to say their names — international powers supporting this."

In Gaza, Hamas said the time was not ripe for it to halt attacks against Israel.