Bush tours Israel's ancient fortress of Masada

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A cable car carried Bush to the top of the towering plateau, where in an act chronicled by a 1st-century historian, 960 Jewish men, women and children committed suicide rather than surrender to Roman forces crushing a rebellion in ancient Judea.

Bush, on a three-day visit to celebrate Israel's founding 60 years ago, flew to the desert south of Jerusalem hours before Palestinians were to due mark the anniversary, which they commemorate as the "Nakba", or catastrophe, with a mournful siren.

"The courage and bravery of those who fought at Masada can be seen in Israelis today," White House spokeswoman Dana Perino said before Bush's visit to the site of ancient Roman ramparts overlooking the Dead Sea.

After viewing ruins including a unique water collection system that sustained besieged Jewish zealots at Masada, Bush - viewed by many Israelis as the best friend their country has had in the White House - planned to address Israel's parliament, the Knesset.

Before making his second trip this year and also of his presidency to Israel, Bush expressed hope an Israeli-Palestinian peace accord could be reached by the time he leaves office in January.

There have been few signs of progress in the U.S.-brokered negotiations since promises were made at a peace conference in Annapolis, Maryland, in November.

In the latest setback to a deal with Palestinian President Mahmoud Abbas, Israeli Prime Minister Ehud Olmert has been urged to resign over suspicions he took bribes from a U.S. businessman. Olmert has denied wrongdoing but has pledged to quit if indicted, and this could delay any peace accord.

GAZA VIOLENCE

Violence around the Hamas-controlled Gaza Strip still hampers peace efforts. A rocket fired from the territory hit a shopping mall in the southern Israeli city of Ashkelon, wounding several people on Wednesday as Bush and Olmert met in Jerusalem.

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)