Kananaskis, Alberta ? In the isolation of a heavily guarded mountain retreat, global leaders challenged President Bush’s call for Yasser Arafat’s ouster at a summit shaken by the WorldCom accounting scandal that sent markets nosediving Wednesday.

“It’s a preoccupation of all leaders that this is creating … a lack of confidence in the markets,” Canadian Prime Minister Jean Chretien said on the first day of the two-day summit.

As Bush fretted about the health of U.S. financial markets, he found scant support among Group of Eight leaders for his demand that Palestinians “make right decisions” and elect a new leader. Bush has “given up hope” on Arafat, a White House spokesman said.

British Prime Minister Tony Blair came closest to the U.S. position, saying that “there has been an attitude toward terrorism” under Arafat. Other leaders steered far clear of denouncing Arafat as they gathered in secluded serenity at a Canadian Rockies resort.

“With regards to the head of the Palestinian authority it is, naturally, for the Palestinian people and them alone to choose their representatives,” French President Jacques Chirac told reporters.

Chretien said he backed Bush’s call for Palestinian elections and other reforms, but as for Arafat’s future: “It will have to be the people of Palestine that will decide who will be the leader. It is premature for me to conclude who will be the leader.”

The Mideast crisis consumed the leaders’ one-on-one talks, and more discussions were planned at a private dinner for the eight leaders. Chretien had hoped to keep focus on African aid, the global economy and terrorism.

The leaders released a three-page counterterrorism agreement to improve transportation security. The accord makes no immediate advances, but commits the nations to work together on initiatives such as reinforced cockpit doors and travel ID documents including fingerprint or face or iris scans.

The leaders also sought vague agreement on African aid. And the United States won pledges from the other rich nations that they will contribute $10 billion over the next decade to match a similar amount in American spending to help dispose of Russia’s nuclear stockpile, according to a U.S. official who spoke on condition of anonymity.

The official said the only remaining sticking point was getting Russia to agree to the conditions under which the program, sought by Russian President Vladimir Putin, will be run. That issue was to be discussed during the G-8 dinner, the official said. U.S. officials had said earlier they expected a vague statement of principles rather than a full-fledged accord.