ALGARY, Alberta, June 26 President Bush told his key allies today that the United States would cut off aid to the Palestinians if they failed to embrace the kind of changes he demanded on Monday.
He also stepped up his pressure for the removal of Yasir Arafat by warning that "we won't be putting money into a society" dominated by corrupt leadership that helps to finance terrorists.
Mr. Bush's warning came as he met with Britain's prime minister, Tony Blair, who became the first major ally to come close to embracing Mr. Bush's new approach to the Middle East. But on the sidelines of today's summit meeting of the Group of 8 major industrial nations, held in a mountain resort 60 miles from here, officials of other nations, including Russia, warned that the threats could backfire and result in a resounding electoral mandate for Mr. Arafat.
The Palestinian Authority today formally announced a 100-day timetable for reform that had been sent to Mr. Bush and Arab leaders before Mr. Bush's speech on Monday. Elections for president will be held in January, the Palestinians confirmed, although there were conflicting reports from senior officials about whether Mr. Arafat would run.
Without mentioning Mr. Arafat by name, Mr. Bush told reporters today, "I've got confidence in the Palestinians, when they understand fully what we're saying, that they'll make the right decisions." But then he warned, "I can assure you, we won't be putting money into a society which is not transparent and corrupt and I suspect other countries won't either."
Within hours, a senior administration official briefing reporters by telephone from the meeting site, in Kananaskis, took the warning a step further, saying that while the Palestinian people were free to re-elect Mr. Arafat, they should know that it would cost them significant aid.
"We respect democratic processes," the official said, "but there are consequences."
The United States does not give money directly to the Palestinians, but channels it through nongovernmental organizations, the United Nations and the World Bank. For example, in April, Assistant Secretary of State William Burns announced that the United States would add $30 million to its $80 million contribution this year to the United Nations Relief and Works Agency.
Mr. Bush's warning and the comments of his aide went significantly beyond those Tuesday by Secretary of State Colin L. Powell, who said that if Mr. Arafat were re-elected, the United States would find a way to deal with the situation.
Clearly some of Mr. Bush's summit partners are uncomfortable. The European allies who have often expressed more sympathy for the Palestinians and their cause may be reluctant to countenance a cutoff of funds, particularly humanitarian aid.
By the end of the day the eight leaders, who were supposed to discuss ways to combat terrorism, issued a vague document promising more cooperation on policing international transportation, from passenger aircraft to the millions of containers that are shipped around the world. Many experts fear the container trade could provide an easy way to send a bomb or a biological weapon into a harbor.
The document by the eight representing the United States, Canada, Britain, France, Italy, Germany, Japan and Russia calls for the collection and sharing of advance information about passengers, reinforcing cockpit doors and improving worldwide notification about lost or stolen passports.
But the accord on containers illustrated the obstacles. Some of the changes, including sharing electronic customs information about the contents of containers, will not be implemented until 2005.
"There is enormous room here for mischief," one senior American official said in the days before the summit meeting began. "This is one of the biggest threats, and the hardest to police. How do you find a bio-weapon in a collection of household goods?"
While the discussions continued, however, American officials found themselves explaining to their allies Mr. Bush's decision to call for Mr. Arafat's removal.
The senior administration official who briefed reporters today confirmed that the president had received an intelligence report that Mr. Arafat had approved a $20,000 payment to members of Al Aksa Martyrs Brigades, a Palestinian terror organization.
The official said "the president was well on his way" to calling for a change of leadership in the Palestinian Authority, and added that the intelligence report was not "dispositive." But another official said, "It was a factor in the president's thinking."
The report, a senior official in Washington said today, was delivered by Israeli officials to the National Security Council, and the Central Intelligence Agency did not have much time to examine the information. The official said the C.I.A. did not challenge the Israeli information, but its analysts were in the position of having to rely on Israeli intelligence sources in a conflict in which Israel is not a neutral player.
The information about Mr. Arafat's financial ties to people or organizations that have supported the suicide bombings and other terrorist acts against Israel was part of a steady stream of reports that Israel has been providing to the White House, officials said.
"The president has been very clear that he thinks that there are problems with terrorism there," the senior administration official said. "We've been very clear that it's a leadership that has done virtually nothing to break up the terrorist brigades that roam around its territory, with which it has clear links. We've been very clear that Chairman Arafat has failed not just the world and Israelis, but he's failed his own people."
Hassan Abdulrahman, Mr. Arafat's representative in Washington, said the Palestinian Authority had not responded to the allegations in the intelligence report "because we have not seen it."
Mr. Abdulrahman said Palestinian officials were aware that Prime Minister Ariel Sharon made several last-minute efforts to influence President Bush before Monday's speech.