President Bush says Iran is the world's largest sponsor of terrorism, and a source of instability in the Middle East. VOA White House Correspondent Paula Wolfson reports in the only speech of his Mideast trip, the president urged the people of the region to reject extremism and embrace freedom.

Standing on a stage in Abu Dhabi, less than 300 kilometers across the Persian Gulf from Iran, President Bush called for unity against Tehran.

"Iran's actions threaten the security of nations everywhere. So the United States is strengthening our long-standing security commitments with our friends in the Gulf, and rallying friends around the world to confront this danger before it is too late," said Mr. Bush.

He said Iran is the world's largest state sponsor of terrorism, listing Tehran's support for extremists in Iraq, Lebanon, and the Palestinian territories.

"It sends hundreds of millions of dollars to extremists around the world, while its own people face repression and hardship at home," added President Bush.

Mr. Bush told Iran's neighbors that the kind of extremism embraced by the government in Iran stands in opposition to their hopes for a better future.

He said Iran provides a vivid contrast to other countries in the region that are moving toward greater freedom and openness to the world. He said no one should doubt America's commitment to help those leaders who embrace change, pointing to the assistance the United States gave nations in Asia and Europe devastated during World War Two.

"The United States has no desire for territory. We seek our shared security in your liberty. We believe that stability can only come through a free and just Middle East where the extremists are marginalized by millions of moms and dads who want the same opportunities for their children that we have for ours," continued Mr. Bush.

The speech came roughly mid-way through a Middle East trip that has taken President Bush to Israel and the West Bank, where he sought to encourage peace talks between Israelis and Palestinians.

He said he came away encouraged, adding that even though talks on the parameters of a Palestinian state are just beginning, hopes are high.

"We will encourage reconciliation between the Israeli and Palestinian people, foster reconciliation between Israelis and Arabs and build a foundation for lasting peace that will contribute to every state in the Gulf," he said.

The president is visiting several Gulf states on this trip, and came to the United Arab Emirates from Bahrain - the headquarters of the U.S. Fifth Fleet. While there, he visited a naval facility that provides support for U.S. forces in Iraq.

He sat down for breakfast with one group of sailors, and got a briefing from the Fifth Fleet commander on the recent incident in the Strait of Hormuz in which Iranian military craft menaced American naval vessels. White House spokeswoman Dana Perino says the commander told the president the Navy takes the incident deadly seriously.