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JERUSALEM, Jan 11 (Reuters) - The Israeli government said on Friday it endorsed U.S. President George W. Bush's call during his visit for a rapid peace agreement but made clear it does not see the final establishment of a Palestinian state this year.

Pressed repeatedly on whether Israel expects to sign a final "peace treaty" by the time Bush steps down next January, Prime Minister Ehud Olmert's spokesman told a news conference that Israel hoped for a "historic agreement" in 2008 that would "outline the framework" of a future Palestinian state.

Spokesman Mark Regev stressed that Israel would not agree to any agreement going into force until it considered that the Palestinian Authority had met its commitments under the 2003 "road map" peace plan to crack down on militants -- "a lot of work will have to be done" before implementation, he said.

Bush said on Thursday that he believed there would be a "signed peace treaty" within the year and, in unusually stark remarks from Israel's main ally, said a Palestinian state was "long overdue" and that Israel's must end its "occupation".

Asked whether Olmert was ready to negotiate a full "peace treaty" this year, rather than an interim "framework agreement", Regev said: "We believe it's possible to achieve by the end of 2008 a historic agreement."

Asked if that meant a final treaty, he said: "I hope we will have a historic agreement that ... outlines the framework, the structure, the vision for a future Palestinian state."

He said such a deal would provide a "vision for the moderates" among Palestinian leaders to get the upper hand over militants intent on fighting Israel and added: "Every agreement will be implemented subject to the road map."

Palestinians accuse Israel of failing to implement the road map by continuing to expand West Bank settlements. Regev said Israel had frozen some settlement activity but did not regard building in areas it has annexed to Jerusalem as affected by the road map. The annexation is not recognised internationally.

Regev said Abbas must do more to improve security in the occupied West Bank and to end attacks from the Gaza Strip, where Abbas's Hamas Islamist rivals seized control seven months ago.

Overall, Israel endorsed Bush's strong statement calling for a rapid peace agreement, Regev said: "We view that statement by the president positively.

"We come out of this visit with greater energy, greater momentum in the peace process," he added as Bush headed for Kuwait on the next leg of his tour.

Among Bush's priorities in the Middle East is shoring up Arab support for U.S. opposition to Iran's nuclear programme. Israeli officials have also used Bush's visit to press their own concerns that Tehran could attack Israel with nuclear weapons.

"On Iran, Israel and the United States are on the same page," Regev said. "A nuclear-armed Iran is simply a nightmare." (Reporting by Alastair Macdonald; Editing by Charles Dick)

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