Earlier, in Dubai, Bush got a flavour of the cosmopolitan banking and business hub, his second stop in the seven-state UAE federation.

After watching a group of girls dancing rhythmically to Arabic music, Bush had lunch with students of the Dubai School of Government, a research and teaching institution that focuses on public policy in the Arab world. The President and his hosts sat on cushions, set in a circle, their food in bowls on the floor before them.

“I’m most impressed with what I’ve seen here. The entrepreneurial spirit is strong, and equally importantly, the desire to make sure all aspects of society have hope and encouragement,” Bush later told a gathering of entrepreneurs.

“I also want you to understand something about America - that we respect you, we respect your religion and we want to work together for the sake of freedom and peace,” Bush told the group.

Dubai, concerned about being a target for Islamic extremist terrorism that has hit other nations in the region, has installed one of the world’s most comprehensive homeland security and anti-terrorism systems. Many anti-terror analysts believe the threat in Dubai is growing — fueled by the city’s image as a bastion of Western-style capitalism, its new status as home to the world’s tallest building and the frequent port calls by US Navy ships.

Dubai has a powerful Iranian business community, and the West, led by the US, is cracking down on business in and out of Iran to protest against its nuclear ambitions. Dubai is caught in the middle — eager to maintain its lucrative business with Iran, but wary of angering the US and the UN.