(Adds EU representative, Palestinian prime minister)

By Samia Nakhoul

UNITED NATIONS, Nov 12 (Reuters) - King Abdullah of Saudi Arabia told world leaders at a U.N. interfaith meeting on Wednesday that terrorism is the enemy of all religions, calling for a united front to combat it and promote tolerance.

"We state with a unified voice that religions through which Almighty God sought to bring happiness to mankind should not be turned into instruments to cause misery," the king said, opening a U.N. General Assembly meeting initiated by Riyadh.

"Terrorism and criminality are the enemies of every religion and every civilization. They would not have emerged except for the absence of the principle of tolerance."

The two-day forum marks a new direction for Saudi Arabia, the world's leading oil exporter, whose austere "Wahhabi" Islam came in for criticism after the Sept. 11 attacks in 2001 on the United States, Riyadh's main ally and guarantor of security.

Fifteen of the 19 Arabs who killed some 3,000 people by flying planes into New York's World Trade Center and the Pentagon near Washington were Saudis, acting in the name of Saudi-born al Qaeda leader Osama bin Laden.

Since then, the Saudi monarch has sought to improve the image of a system in which the royal family rules in alliance with a powerful conservative clerical establishment.

"Human beings were created as equals and partners on this planet," Abdullah said. "Either they live together in peace and harmony or they will inevitably be consumed by the flames of misunderstanding, malice and hatred."

U.S. President George W. Bush, British Prime Minister Gordon Brown, Pakistani President Asif Ali Zardari, Afghan President Hamid Karzai and leaders and diplomats from some 60 other countries are taking part in the gathering.

Israeli President Shimon Peres seized the rare chance of sharing a forum with Abdullah to directly address him, praising his words and a Saudi Middle East peace initiative. Riyadh has no ties with the Jewish state and its officials shun Israelis.

"Your majesty, the king of Saudi Arabia, I was listening to your message. I wish that your voice will become the prevailing voice of the whole region, of all people. It's right, it's needed, it's promising," Peres said.

"The initiative's portrayal of our region's future provides hope to the people and inspires confidence in the nations."

The 2002 plan promotes the formula of Israel trading occupied Arab land in return for normal relations.

FREEDOM OF SPEECH

U.N. Secretary General Ban Ki-moon also praised Abdullah, calling the meeting "a truly inspiring initiative for global harmony." An international effort was needed to combat a rising tide of communal strife and religious extremism, he said.

"Extremist ideologies are on the rise. Societies are more polarized. Anti-Semitism remains a scourge. Islamophobia has emerged as a new term for an old and terrible form of prejudice," the U.N. chief said.

But former French Prime Minister Alain Juppe, speaking for the European Union, said free speech was an essential condition of dialogue -- a reference to the 2005 publication in a Danish newspaper of caricatures of the Prophet Mohammad that sparked violent protests in the Islamic world.

"Freedom of religion cannot be achieved without freedom of speech, even if it is sometimes used to express derision," Juppe said.

Palestinian Prime Minister Salam Fayyad used the U.N. podium to urge an end to the 60-year-old conflict between Israel and the Palestinians, which he said was fueling religious extremism, racial discrimination and intolerance.

Jordan's King Abdullah said it was impossible to talk about interfaith harmony without resolving that conflict.

The forum has come under criticism from human rights groups who say it gives Saudi Arabia a platform to promote religious tolerance abroad while imposing discrimination at home.

Saudi Arabia, home to Islam's holiest sites, forbids public non-Muslim worship and imposes gender segregation and death sentences by public beheadings. Its own minority Shi'ite Muslims face discrimination.

In Washington, White House spokeswoman Dana Perino said Bush believes "that the king of Saudi Arabia has recognized that they have ... a long way to go and that he is trying to take some steps to get there."

Diplomats said that to avoid possible disputes, the meeting was expected to end with a non-binding oral statement by the General Assembly president rather than a written declaration. (Editing by Vicki Allen)

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