Bush heads back to Mideast amid fading peace hopes

By Matt Spetalnick

WASHINGTON (Reuters) - President George W. Bush heads back to the Middle East on Tuesday facing broad skepticism over his chances of securing an Israeli-Palestinian peace deal before he leaves office in less than nine months.

His second trip to the region this year will get under way in Israel where celebrations of its 60th anniversary have been marred by a bribery scandal surrounding Prime Minister Ehud Olmert that could topple him and disrupt the peace process.

Bush also will be mindful of another crisis brewing next door in Lebanon, where a power struggle between the pro-Western government in Beirut and Iranian-backed Hezbollah could deal a further blow to U.S. efforts to stabilize the Middle East.

With the clock ticking down on his administration, Bush will nudge Israelis and Palestinians to advance their faltering negotiations as he tries to salvage a foreign policy legacy encompassing more than the unpopular war in Iraq.

But expectations for progress remain low.

"It's hard to remember a less auspicious time to pursue Arab-Israeli peacemaking than right now," said Jon Alterman, a Middle East expert at the Center for Strategic and International Studies in Washington. "The politics on the ground are absolutely miserable."

Olmert and Palestinian President Mahmoud Abbas agreed at a U.S.-hosted conference in Annapolis, Maryland, in November to try to reach a peace treaty, including an agreement on Palestinian statehood, by year's end.

Since then, talks have bogged down over Israeli settlement expansion plans in the occupied West Bank and violence in and around the Gaza Strip, where Hamas cross-border rocket fire has drawn a tough Israeli military response.