Bush, in a statement issued after the polls, called Sunday's elections "a historic day for the Palestinian people" and said he is "heartened" by strong turnout in the elections.

"Palestinians throughout the West Bank and Gaza took a key steptoward building a democratic future by choosing a new president inelections that observers describe as largely free and fair," he said.

The Palestinian elections to elect chairman of the Palestinian National Authority (PNA) ended throughout the West Bank, the Gaza Strip and east Jerusalem on Sunday evening and exit polls showed that Mahmoud Abbas won 66 percent of the votes.

In the statement, Bush also said the United States "stands ready" to help the Palestinian people realize their aspirations ofestablishing a Palestinian state.

"The new Palestinian president and his cabinet face critical tasks ahead, including fighting terrorism, combating corruption, building reformed and democratic institutions and reviving the Palestinian economy," he said.

Bush said he looks forward to working with the new Palestinian leader and the Palestinian people to address these challenges and to advance the cause of Middle East peace.

Meanwhile, Bush urged Israel to improve the humanitarian and economic situation in the West Bank and Gaza and follow through with the disengagement plan put forward by Israeli Prime Minister Ariel Sharon.

He also stressed "The Arab states must take concrete steps withall parties to create a regional environment conducive to peace, lend financial support to the Palestinian people and refuse to assist or harbor terrorists."