What really chaps my ass is that this move was completely unnecessary on Bush's part. Sharon only needed the barest sign of approval so he could reassure the hardliners back home. I really don't think Sharon should have been supported in this one iota, but if Bush wanted Sharon's plan to go forward, all he had to do was give a fairly neutral speech with a little wink and nudge buried in it. Something like "although remaining settlements in the West Bank will continue to be a barrier to a viable Palestinian state, we welcome this bold step towards peace on the part of Israel." That would have let Sharon go home to Likud and tell them that the US supported his plan, while allowing the US to retain it's credibility as a neutral arbiter.
Instead Bush went back on 30 years of US foreign policy, and totally screwed the Palestinians. First, he gave away the "Right of Return", which would allow Palestinians who were expelled from Israel in 1948 to return to their land. This is a bad move since it takes away one of the Palestinian's bargaining chips, but it's not a disaster. The palestinians were going to have to give that up anyway; it's never going to happen, and everyone knows it. The real mess is in endorsing the Israeli settlements in the West Bank. The Palestinians have always wanted to go back to the 1948 boarders, and Israel wanted to give nothing back. Theoretically they'll meet in the middle some day and go back to the pre-1967 boarder, which is what just about every Middle East peace plan calls for, as it's the logical solution. That's now been taken off the table, probably for years to come, and with it any chance for a lasting peace in the near future.
This is just bad news all around. It's bad for the Palestinians; they now have no chance of achieving statehood by 2005. It's bad for Israel; The Palestinians lacking a chance to achieve at least some of their goals through negotiation will almost certainly lead to more terrorism. And it's definitely bad for us; we're not exactly winning any popularity contests among Arabs right now, and the last thing we needed to do was get them even more pissed at us, especially over something that has absolutely no benefit for us. We've always been seen as favoring Israel in this dispute, and coming right out and stating our complete support for their policies sure sealed the deal.