Crawford, Texas ? With Israel defying him, President Bush told the Jewish state Saturday to withdraw its troops from Palestinian areas “without delay.” He and Britain’s leader agreed the world would be better off without Saddam Hussein’s regime, but said they have not settled on a way to deal with the Iraqi president.

“I can’t imagine people not seeing the threat and not holding Saddam Hussein accountable for what he said he would do,” Bush said of Saddam’s pursuit of weapons of mass destruction. “And we’re going to do that.”

Bush, at a news conference with British Prime Minister Tony Blair, was answering critics, including European allies and even members of Blair’s own Labor Party, who do not want the U.S. military to try to overthrow Saddam.

As storm clouds blew across Bush’s secluded ranch, the leaders discussed grim news from the Middle East: Israeli assaults, aimed at Palestinian militants, have spread throughout West Bank refugee camps despite Bush’s call Thursday for Israel to withdraw its troops.

A day before Secretary of State Colin Powell was leaving for the Mideast to push for a cease-fire, Bush stepped up pressure on Israel. For the first time, he directly called for an immediate pullback.

“We agree that Israel should halt incursions in the Palestinian-controlled areas and begin to withdraw without delay from those cities it has recently occupied,” Bush said. Blair, at Bush’s side, nodded.

Blair sought to soften the blow for Israel. “I think that most people in Israel will realize that they don’t have two greater friends in the world than the United States of America or Britain,” he said.

An Israeli government spokesman said Israel would “give a lot of weight to their opinions.”

“At this point our mission continues. We will try to conclude it as quickly as possible,” Danny Seaman said.

Holding forth in a small-town high school gym, the president refused to say whether there would be consequences for Israel if Prime Minister Ariel Sharon refused to withdraw.

“I expect Israel to heed my advice, and I expect for the Palestinians to reject terror. And the Arab world, as Israel steps back, we expect the Arab world to step up and lead,” Bush said.

Aides said the president has become increasingly frustrated with Sharon who, in Bush’s view, stubbornly has clung to his position that the attacks are the only way to defend Israel against terrorist strikes.

That shift came quickly as the death toll mounted: Just a week ago, Bush had told reporters at his ranch that he understood why Israel was invading Palestinian territory.

Pressing the Palestinians as well, Bush has instructed Powell to urge moderate Arab leaders such as Egyptian President Hosni Mubarak and King Abdullah II of Jordan to join with the United States in an unprecedented alliance seeking peace.

Specifically, Bush wants the Arab leaders to compel Arafat to crack down on Palestinian militants. Powell will warn them they will bear responsibility if terrorism continues, said a senior Bush administration official who spoke on condition of anonymity.

The appeal to Arab moderates also reflects Bush’s frustrations with Palestinian leader Yasser Arafat, whom Bush seems to be giving a final chance to get involved in the peace process.

“He needs to speak clearly, in Arabic, to the people of that region and condemn terrorist activities. At the very minimum, he ought to at least say something,” Bush said.

A few blocks away in the small Texas town, several hundred Arab-Americans gathered at a community center to protest the Israeli actions. “No justice! No peace!” they shouted.

The British government is believed to be less inclined than Bush to isolate Arafat, but Blair did not address the topic in their 20-minute news conference.

On Iraq, Blair carefully measured his words to show support for Bush without endorsing military action, which the president has yet to rule in or out.

“Any sensible person looking at the position of Saddam Hussein and asking the question – would the region, the world and, not least, the ordinary Iraqi people, be better off without the regime of Saddam Hussein? – the only answer anyone could give to that question would be yes,” Blair said.

Neither leader said, however, how that could be accomplished. Left unsaid, too, was a growing consensus that the Middle East crisis and the resulting unrest in the Arab world have threatened Bush’s plans to act against Saddam sooner rather than later.

Bush repeated his charges that Saddam kills his own citizens, defies promises to allow weapons inspectors into his country and develops weapons of mass destruction that could be used by terrorists against Europe, Israel or the United States.

“The world would be better off with him,” Bush said.

He was less certain about U.S. policy that calls for the overthrow of Saddam, dating to the 1995 Iraq Liberation Act signed by President Clinton. Bush reaffirmed his commitment to the regime-change policy, and recalled that it began under Clinton.

Asked whether his father had the same policy, Bush said with a chuckle, “You know, I can’t remember that far back.”

Critics have second-guessed the first President Bush for pushing back Iraq’s 1990 invasion of Kuwait but ending the Persian Gulf War with Saddam still in power.

Later at the ranch, Bush’s 20-year-old daughter, Jenna, and Blair’s daughter Kathryn, 14, were joining their parents for a dinner of pecan-smoked beef tenderloin.