By Sue Pleming

ANNAPOLIS, Md., Nov 27 (Reuters) - U.S. President George W. Bush urged skeptical Arab states on Tuesday to reach out to Israel whose prime minister urged Arab nations not to "watch the peace train go by."

For months, Bush has been pushing for greater Arab buy-in for revived Israeli-Palestinian negotiations, which were officially launched at a Middle East conference in Annapolis, Maryland, after seven years of dormancy. The goal is a peace treaty within 13 months that would create a Palestinian state.

About a third of the participants at Tuesday's conference were Arab states, including key players Saudi Arabia and Syria who do not recognize Israel and held out until the last minute before agreeing to attend the U.S.-hosted meeting.

"Arab states also have a vital role to play," said Bush at the conference, which will be followed by White House meetings on Wednesday with Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas.

"Arab states should also reach out to Israel, work toward the normalization of relations and demonstrate in both word and deed that they believe that Israel and its people have a permanent home in the Middle East," Bush said.

Olmert, for his part, said there was not an Arab state with which Israel did not seek peace and diplomatic relations.

"You cannot continue to stand by indefinitely and watch the peace train go by. It is time to end the boycott and alienation toward the state of Israel. It is not helpful for you and it hurts us," said Olmert.

Saudi Arabia, echoing many other Arab states, pushed for a broader Arab-Israeli peace plan that included tackling the Syrian and Lebanon tracks after the Annapolis meeting.

"We have come to support the launching of serious and continuing talks between the Palestinians and the Israelis that will address all the core and final status issues. These talks must be followed by the launching of the Syrian and Lebanese tracks at the earliest," said Saudi Foreign Minister Saud al-Faisal.

Jordan's Foreign Minister Salaheddin al-Bashir said in order for the region to enjoy permanent peace and security, the plan must be comprehensive.

"This requires we also address the two other tracks: the Syrian-Israeli peace track including the issue of the occupied Golan Heights; and the Lebanese-Israeli peace track," he said.

Syrian-Israeli negotiations collapsed in 2000 over the future of the Golan Heights, which was captured by Israel in the 1967 war.

Both Olmert and Bush referred to the Arab peace initiative which was revived earlier this year and offers the Jewish state normal relations with all Arab states if it withdraws from all Arab territories seized in the 1967 war.

Saudi ambassador to the United States, Adel al-Jubeir said there could not be a normalization by his country of ties with Israel until there was a peace agreement.

"You do not get the fruits of peace before you make peace and we have made that very clear," the Saudi envoy told reporters. (editing by Jackie Frank)

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