Some leaders expressed apprehension on Wednesday about US President George Bush's hopes to democratise the region.
The Broader Middle East and North Africa Initiative, a watered-down version of an earlier highly controversial proposal, reflects the deep-seated concerns of many Arabs, Muslims and Europeans by stressing the importance of Palestinian-Israeli peace as a catalyst for reform.
But it also maintains that the lack of a settlement cannot be an excuse for inaction and that reforms should not be stalled by the unstable situation in Iraq.
The original initiative had been criticised by some analysts as being little more than a US bid to increase economic and political leverage within the region.
Focus on change
"Our support for reform in the region will go hand in hand with our support for a just, comprehensive and lasting settlement to the Arab-Israeli conflict," the leaders of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States said in a joint statement issued at the summit, held off the southern US state of Georgia.
"Successful reform depends on the countries in the region, and change should not and cannot be imposed from outside"
It pledges G8 backing for "the fully sovereign Iraqi interim government as they seek to rebuild their nation" as well as support for elections there no later than 31 January 2005.
Mentions of the Palestinian-Israeli conflict and Iraq were made in the largest single paragraphs in the 12-point, four-page statement, which Washington had hoped would focus almost exclusively on the urgent need for social and political change in the Middle East.
The plan calls for G8 members to assist home-grown liberalisation in the Arab and Muslim worlds and outlines a "partnership for progress and a common future with the region of the broader Middle East and North Africa", that foresees financial, vocational, educational and human rights programmes.
Future reform forums
The leaders agreed to create a Forum for the Future comprising G8 and regional ministers in order to foster regular discussions on reform, starting in late 2004.
But the initiative did not ignore Arab and Muslim fears that it is merely a tool to impose western values on their traditional societies.
The US hopes 'the new Iraq' will
be an example to the region
"Successful reform depends on the countries in the region, and change should not and cannot be imposed from outside," the G8 leaders said. "Each country is unique and their diversity should be respected."
"Our engagement must respond to local conditions and be based on local ownership," they said. "Each society will reach its own conclusions about the pace and scope of change."
"Yet distinctiveness, important as it is, must not be exploited to prevent reform," they added, under what appeared to be US pressure to close off a potential loophole that might prevent efforts to promote serious changes.
Despite Washington's excitement about the plan, Bush's fellow G8 leaders and their delegations were demonstrably unenthusiastic about the prospects for what was once known as the Greater Middle East Initiative.
Since Tuesday, the concept had been losing steam as the G8 leadership - to whom Bush was looking for strong backing - increasingly questioned its wisdom and motives.
"Our support for
reform in the region
will go hand in hand with our support for a just, comprehensive and lasting settlement to the Arab-Israeli conflict"
French President Jacques Chirac, already at odds with Bush over a possible NATO role in Iraq, notably criticised the initiative at a luncheon with Arab and Muslim leaders during which he said the region did not need "missionaries of democracy".
He allowed that the proposal "might contribute" to liberalisation already under way in several countries but stressed the Israeli-Palestinian conflict and the situation in Iraq are the "main obstacles" to reform in the region.
Palestine and Israel
Chirac's comments echoed sentiments expressed on Tuesday by European Commission chief Romano Prodi, who warned that "the mother of all conflicts is the Israeli-Palestinian conflict".
EU officials have said that any US focus on the region is welcome, but Stefano Sanino, a diplomatic adviser to the European Commission, said Europe had been working along the same lines for years.
"For us, there is nothing new in this," he said.
One G8 diplomat, who spoke on condition of anonymity, savaged the entire concept. He told French news agency AFP that it was nothing more than a dishonest scheme to keep US troops in the Middle East to protect US access to Saudi Arabian oil.
Egypt and Saudi Arabia, two countries covered by the initiative but alarmed by its potential implications, declined invitations to the summit.
Tunisia, which holds the rotating presidency of the Arab League, followed suit. Leaders of Afghanistan, Algeria, Bahrain, Jordan, Turkey and Yemen accepted Bush's invitation, however.