Palestinian leaders will fly to Britain next month to take part in an international conference on the Middle East.

The prime minister told MPs: "It is in the interest of both the Palestinians and the Israelis that these reforms succeed so we can make a reality of president George Bush's vision of two states, Israel and Palestine, living side by side in peace and security."

The conference will be chaired by the foreign secretary, Jack Straw, and aims to help Palestinians prepare for running their own state.

Tony Blair made the announcement after meeting president Assad of Syria in Downing Street.

The prime minister admitted that he and the president were at odds on key issues but insisted that a policy of engagement was right in the circumstances.

President Assad, who yesterday refused to condemn suicide bombers, will today pay a 20 minute visit to the Queen at Buckingham Palace.

Meanwhile Iraq was warned by the US yesterday that it has been given its last chance to disarm.

Washington is expected to give its response to Saddam Hussein's weapons declaration within days.