U.S. President George Bush has set off a political furor back home following a speech in Israel where he suggested that some politicians are ready to "negotiate with terrorists."

Marking the 60th anniversary of Israel's founding, Bush told members of Israel's legislative body at the Knesset that he condemned "the false comfort of appeasement ... that we should negotiate with the terrorists and radicals, as if some ingenious argument will persuade them they have been wrong all along."

He then compared such a strategy to speaking with Hitler and the Nazis in the lead up to Germany's takeover of Poland and the start of the Second World War.

While he did not mention Barack Obama by name, Democrats accused Bush of cheap political posturing.

Obama, the likely Democratic presidential nominee, has suggested that, as president, he would be willing to negotiate with countries considered to be enemies of the U.S., including Syria, North Korea and Iran.

Obama issued a statement saying that Bush had launched a "false political attack" against him.

"George Bush knows that I have never supported engagement with terrorists, and the president's extraordinary politicization of foreign policy and the politics of fear do nothing to secure the American people or our stalwart ally Israel," Obama said in the statement.

The White House denied Bush's comments were aimed at Obama.

But Democrats lashed out at what they perceived as an attack on their presumptive leader. Delaware Senator Joe Biden didn't mince any words.

"This is outrageous, for the president of the United States to go to a foreign country, to sit in the Knesset . . . and make this kind of ridiculous statement."

Obama's Democratic opponent, Hillary Clinton, called Bush's original comments "offensive and outrageous, especially in light of his failures in foreign policy."

There is an unwritten rule in American politics that foreign trips should not be used to criticize domestic political opponents.

Meanwhile, other aspects of Bush's speech before the Knesset left many Israeli politicians disappointed. Some said that Bush had dropped an opportunity to push Israel and its neighbors into taking substantive steps towards a peace deal.

In his speech Bush said that Palestinians would have a homeland and people in the Middle East will live in "free and independent societies."

Bush added, "a desire for peace (will be) reinforced by ties of diplomacy and tourism and trade."

But he didn't mention any specific steps that would need to be taken to achieve the broad aspirations he described.

"It was an embarrassing speech, a collection of slogans that somebody wrote for him in order to be nice to Israel, or what he thinks is Israel, and to steer well clear of anything concrete," said Israeli lawmaker Yossi Beilin, a key architect of the Oslo peace accords.

"It's a shame and a scandal, in my opinion."