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CRAWFORD, Texas, Sunday (Reuters)

U.S. President George W. Bush demanded on Saturday that Palestinian President Yasser Arafat stop a wave of suicide bombings and said that he fully respected Israel's right to defend itself against them.

Bush called on both sides to find a way to peace but he placed the onus for the latest violence on the Palestinians and did not call for Israeli forces to withdraw from Arafat's Ramallah compound, which they invaded on Friday.

In a hastily arranged appearance, Bush urged Arab leaders to seek an end to the violence -- including a suicide bombing that wounded more than 20 people in Tel Aviv on Saturday -- and said Iran and Syria must stop sponsoring terrorism.

"All of the leaders in the world must stand up against terror ... and that especially applies to Chairman Arafat," a grim Bush told reporters in a small trailer where he conducts secure video conferences with his aides near his ranch.

"I believe he needs to stand up and condemn, in Arabic, these attacks," Bush added, a point U.S. officials have stressed in recent days, suggesting that Arafat's comments in English have much less effect on his people.

Bush said that Israel had assured him it would not harm Arafat as part of its siege of his Ramallah compound and he brushed off suggestions that the Palestinian leader may no longer be able to prevent the suicide bombings.

"He's got a lot of forces; he's got a lot of people that listen to him still," Bush said. "He's got to make it absolutely clear that the Palestinian Authority does not support these terrorist activities and use his security forces to prevent them from happening."

"I have been disappointed in his unwillingness to go 100 percent for fighting terror," Bush added.

TEL AVIV BOMBING

In language strikingly similar to his argument for the U.S. war on terrorism following the Sept. 11 attacks, Bush said that he fully respected Israel's right to defend itself.

"I fully understand Israel's need to defend herself; I respect that," Bush said. "Every day there has been a suicide bombing and every day the government sees the loss of innocent life."

While he did not explicitly call for restraint by Israeli Prime Minister Ariel Sharon, he urged the Israeli government to ponder the consequences of its actions and to make sure "that there is a path to peace as she secures her homeland."

Bush also expressed sympathy for the Palestinians' sense of hopelessness and regret for the deaths of innocents on their side, but added: "The Palestinians, particularly those who long for a peaceful resolution ... must do everything in their power to stop terrorist activity."

In the latest incident, a suicide bomber blew himself up in a busy Tel Aviv restaurant on Saturday, wounding more than 20 people in an attack claimed by the al-Aqsa Martyrs Brigades -- a group affiliated with Arafat's Fatah organization.

FOCUS ON IRAN, SYRIA

While saying he had no hard evidence that Iran and Syria have been involved in the latest wave of suicide bombings, Bush called on both to stop supporting terrorism either directly or through funding.

"The Iranians must step up and stop sponsoring terrorism. The Syrians must participate," Bush said. "I have no direct evidence. Nevertheless, I do know their influence in the region. And if they are interested in a peaceful resolution, they too need to be (active) about cutting off funds."

Bush said he was convinced the attacks were designed to undermine the peace process, saying his Middle East envoy -- Gen. Anthony Zinni -- had been making progress toward a truce last week just before a suicide bomber killed 22 Israelis in the seaside town of Netanya on Wednesday.

That blast took place on the first night of the Jewish celebration of Passover and has ushered in a series of attacks through the Easter weekend.

"It's clear to me the more progress we make toward achieving a cease-fire or meaningful security discussions, the more a killer organization will try to disrupt the process," Bush said. "Here we are on one of the holiest of holidays and we're worried about people needlessly losing their lives." 

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