CAIRO Ñ Arab and Islamic states have rejected a U.S. effort to launch a democracy and reform campaign in the Middle East.

Instead, Arab and Islamic states said reform and democracy in the region would be linked to the Arab-Israeli conflict. They dismissed a U.S. appeal that reform begin without any connection to political disputes in the region.

Officials said the next "Forum for the Future" conference would be held in November 2005, Middle East Newsline reported. They said the venue would be Bahrain.

A communique issued at the end of the "Forum for the Future" conference held in Morocco on Saturday asserted that the Arab-Israeli conflict comprised the leading obstacle to reform and democracy in the Middle East.

The statement said the 30 nations at the Rabat conference "reaffirmed that their support for reform in the region will go hand-in-hand with their support for a just, comprehensive and lasting settlement to the Arab-Israeli conflict."

The United States tried to maintain a brave face at the conference. Secretary of State Colin Powell said he was not disappointed with the rejection of his call for Arab and Islamic reform and democracy.

"Increasing opportunities for all citizens, especially women, should not be put on hold to deal with other concerns," Powell said. "All of us confront the daily threat of terrorism. To defeat the murderous extremists in our midst, we must work together to address the causes of despair and frustration that extremists exploit for their own ends."

The conference also fell short of U.S. expectations for a fund to help small businesses in the Middle East. The United States had hoped that nations would donate $100 million to the fund, but only $60 million was pledged.

The 20 Arab and Islamic participants at the conference demanded the resolution of the Arab-Israeli conflict on the basis of an Israeli withdrawal from all areas deemed occupied. The statement cited United Nations Security Council resolutions that discussed the conflict. Israel was not invited to the conference and Iran refused to attend.

Later, the foreign ministers of several U.S. allies in the Arab world accused Washington of bias toward Israel. In an assertion echoed by European Union states, the Arab foreign ministers said the Arab-Israeli conflict was preventing development of the Middle East.

"The real bone of contention is the longest conflict in modern history," Saudi Foreign Minister Prince Saud Al Faisal told a news conference after the four-hour session. "For too long, the Arabs have witnessed the Western bias toward Israel."