Bush tours Israel's ancient fortress of Masada
An Israeli air strike later killed two Hamas fighters.
The White House condemned the attack on Ashkelon and blamed Hamas, which Washington considers a terrorist organisation.
Hamas says it wants to destroy Israel, replacing it with an Islamic state also embracing the West Bank and Gaza. However, it has also offered Israel a conditional ceasefire.
In his address to the Knesset, Bush will reiterate that the United States remains Israel's closest friend and ally.
"The United States and Israel share a belief that all people have the right to live in peace, that democracy is the best way to ensure human rights, that religious liberty is fundamental to civilised society and that using violence to achieve political objectives is always wrong," White House spokesman Gordon Johndroe said, giving a brief preview of the speech.
In Gaza, Hamas has urged Palestinians to march on the border and "break the siege" - an Israeli-led embargo that has been stepped up since the Islamists routed Abbas's forces in the enclave last June.
Israel's military garrison at the planned rally point, the border crossing of Erez, was on standby and prepared to use force to repel the Palestinians, a security source said.
At a tribute on Wednesday evening to U.S.-Israeli ties and the 60th anniversary of the founding of the Jewish state, Bush appeared moved to tears when Olmert heaped praise on the U.S. president as a strong friend of Israel.
(Additional reporting by Dan Williams in Jerusalem, Writing by Jeffrey Heller and Alastair Macdonald, editing by Andrew Dobbie)
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Bush recognises Kosovo independence



