Washington ? President Bush stood by Israel Wednesday in its dramatic decision to seize Palestinian areas in response to the latest terrorist bombing in Jerusalem.

The president, whose plans to announce a peace plan were set back by this week’s violent rush of events in Israel, intends to propose the establishment of a Palestinian state with provisional boundaries, but only after dramatic Palestinian reforms that he believes could take as much as a year to implement, a U.S. official said.

As Israeli troops moved into three West Bank towns early Wednesday, White House press secretary Ari Fleischer said: “The president understands Israel’s right to self-defense, particularly in the wake of an attack of this severity.”

The presidential spokesman was reacting to an Israeli government announcement, after the deadliest Palestinian suicide bombing in six years, that its troops would gradually reoccupy Palestinian areas until the attacks cease.

Bush’s deliberations were complicated by divisions within his national security team and Tuesday’s bombing of a crowded bus in Jerusalem, which was followed by Israel’s pledge to occupy Palestinian areas from which dozens of terror attacks have been launched.

Fleischer defended Israel’s decision:

“The president understands that Israel is in the middle of recovering from a very serious terrorist attack. The president believes that Israel has a right to defend itself. The president hopes whatever actions Israel takes will be cognizant of the fact that the path to peace must still be pursued and Israel has to remember the consequences of its actions today for what happens tomorrow.”

Advisers conceded, however, that the events forced Bush to delay announcement of his plan until later in the week.

Bush may couple the announcement with a decision to send Secretary of State Colin Powell to the region to reinforce his message with Israeli and Arab leaders.

Powell’s spokesman, Richard Boucher, said Tuesday that peacemaking would not be sidetracked by terror.

“We continue to look for ways to move forward concurrently on security as well as political progress if we’re going to see a long-term, lasting end to the violence,” Boucher said.

Bush envisions a step-by-step process on Palestinian statehood, with each step conditioned on changes designed to develop a democratic state that would live in peace alongside Israel.

The president plans to propose a Palestinian state with provisional boundaries, but will make the plan contingent upon dramatic Palestinian reforms. A senior U.S. official, speaking on condition of anonymity, said Bush may propose a soft timetable as much as a year for a provisional state because he does not think the reforms can be adopted anytime soon and will not support provisional statehood without them.

He also is likely to suggest a timetable for negotiating permanent borders as much as three years but the official stressed again that Bush is putting more emphasis on the achievement of reforms than deadlines.

Some Bush advisers are pushing for provisional statehood as early as September and in time for an international peace conference. However, the official said that is too soon, and suggested that Bush will use the peace conference to build support for his plan rather than as a deadline for provisional statehood.

“He may throw dates and numbers and timelines out there, but everything is contingent on the Palestinians getting their act together,” said the U.S. official, who is involved in preparing Bush for his upcoming speech.

Several U.S. officials have said the suicide bombing served to delay Bush’s speech by a day or two and emboldened advisers arguing against setting deadlines for provisional or permanent statehood.

Bush plans to ask Israel to end settlements in Palestinian areas, as he did in April, and renew his call for a peace conference that focuses on Palestinian security measures.

Bush is not expected to address the status of Jerusalem, though he has not ruled out weighing in on some of the other border issues.

Already, there is Arab skepticism that Bush will go far enough to satisfy Palestinian aspirations, while Israeli Prime Minister Ariel Sharon says even a limited Palestinian state is premature.

Powell went to the Middle East in April for talks with Sharon and Palestinian leader Yasser Arafat. More recently, CIA Director George Tenet and Assistant Secretary of State William Burns traveled there.

But U.S. efforts to promote peace and improve security have not panned out.

Powell succeeded mostly in persuading Israel to withdraw its forces from the West Bank, including Arafat’s battered headquarters in Ramallah.