US President George W. Bush kicked off his Middle East trip in Israel on Wednesday, hoping to advance peacemaking with the Palestinians while celebrating the 60th anniversary of the Jewish state.

Bush, who has voiced hope for a peace deal by the time he leaves office in January, hailed what he described as a enduring alliance between the United States and Israel against "terrorists".

His visit comes at a time of renewed turmoil in the region which bodes ill for Israeli-Palestinian peace negotiations that have made little tangible progress since they were revived at a conference he hosted in November.

The trip is taking place against a backdrop of deadly sectarian fighting in Lebanon that Bush has blamed on Syria and Iran, defiance from Hamas over truce conditions in the embattled Gaza Strip, and a corruption scandal embroiling Israeli Prime Minister Ehud Olmert.

"We have built an enduring alliance to confront terrorists and tyrants," Bush said in a brief address after his arrival.

"I look forward to discussing how I believe our two nations can continue to advance our ideals and approach our next 60 years of partnership with confidence and with hope."

Olmert hailed Israel's alliance with the United States as "one of the fundamental pillars of our national security."

The US president will also visit Saudi Arabia to mark 75 years of US relations with the oil-rich kingdom, and hold talks in Egypt with regional leaders, including Palestinian president Mahmud Abbas.

The visit to Israel is Bush's second since January -- after seven years in which he did not set foot in either Israel or the Palestinian territories.

He is due to address to parliament on Thursday, when Palestinians will commemorate the exodus of hundreds of thousands of Arabs who lost their homes and their land when Israel was created in May 1948.

Bush's national security advisor Stephen Hadley called Israel's 60th birthday "a great event" but added: "We also recognise that that event resulted in hardship for many Palestinian people."

"And the president, in some sense, is the first leader to come forward and say, we're going to redeem that hardship by giving the Palestinian state a homeland for the Palestinian people in the same way that Israeli 60 years ago became the homeland for the Jewish people," Hadley told journalists.

The US president hopes a peace deal will shore up his legacy and has expressed confidence agreement could be reached in the eight months left in his term despite the lack of any tangible progress in negotiations.

He was to hold talks later Wednesday with Olmert, who faces mounting calls to resign over allegations he took bribes from a millionaire US financier.

Palestinians are concerned that the Olmert affair could make Israel take a harder line regarding settlement building, lead to military escalation and further stall any peace talks.

Since the November agreement between Olmert and Abbas, Israel has announced plans to pursue construction in Jewish settlements in occupied Palestinian lands -- a core dispute. And the United States has said that its ally has not done enough to improve Palestinian quality of life.

Another obstacle is the continuing violence in the Hamas-run Gaza Strip, where Israel conducts regular military raids and imposes a crippling blockade in a bid to force militants to halt almost daily attacks on the Jewish state.

Four Palestinians were killed in Israeli military operations in Gaza on Wednesday, bringing to more than 460 the number of people killed since peace talks were renewed, most of them Palestinian militants.

Both sides have talked separately to Egyptian mediators about a possible truce, but Hamas rejected Israel's demand it first release an Israeli soldier captured almost two years ago.

"We don't welcome you Bush," said Mahmud Zahar, the most influential Hamas leader in Gaza. This lack of welcome also extends to others "who want to please the American devil" Zahar said at a ceremony marking six decades of what Palestinians call the "Naqba" -- Arabic for catastrophe.

Bush faces another crisis in Lebanon, where Israel's archfoe Hezbollah has led an armed campaign against forces loyal to the pro-Western government which has resulted in more than 60 deaths in the past week.

Iran's hardline President Mahmoud Ahmadinejad, whose nation backs Hezbollah, ridiculed Israel's celebrations and said the Jewish state was dying, adding: "throwing a birthday party for this regime is like having a birthday party for a dead person."