CAIRO (Reuters) - The governments of the Middle East, from Iran to Israel and beyond, are increasingly ignoring the wishes of a U.S. administration which has only eight months left in office, going their own way in regional diplomacy.

Iran's President Mahmoud Ahmadinejad laughs while President George W. Bush addresses the 62nd United Nations General Assembly at the U.N. headquarters in New York, September 25, 2007. REUTERS/Shannon Stapleton

U.S. President George W. Bush’s latest speech on Middle East policy, made in the Egyptian resort of Sharm el-Sheikh last week, shows how the gap has grown between what Washington would like and what is happening in the region.

It is part of a wider picture of Washington’s declining clout, accelerated by its debilitating deployment of more than 100,000 troops to Iraq for the past five years.

France has had contacts with the Palestinian Islamist movement Hamas, for example, and Israel has had indirect talks with Syria, which Washington is trying to isolate.

Bush said in Sharm el-Sheikh that all nations in the region should stand together against Hamas, a group which he said was attempting to undermine efforts at making peace.

But the Egyptian government, his host and a longstanding friend of the United States, was simultaneously, and with U.S. consent, trying to mediate a truce between Gaza and Israel.

Israeli commentators said the Egyptian mediation amounted to indirect negotiations between the Israeli government and Hamas, a group with which the United States refuses to have dealings.

The Islamist organization, which controls the Gaza Strip, was offering Israel a long-term truce which could make it easier for the rival Palestinian group Fatah to reach an agreement with Israel -- a goal which the United States says it is promoting.

In his Sharm el-Sheikh speech, Bush also attacked the Lebanese Shi’ite Muslim group Hezbollah, calling it “terrorists funded by Iran” and “the enemy of a free Lebanon”.

HEZBOLLAH’S CENTRAL ROLE

Three days later in the Gulf state of Qatar, Hezbollah and other Lebanese groups reached an agreement ending the political crisis that had paralyzed Lebanon for months.

Hezbollah had defeated its rivals in Beirut in short order this month when Washington’s allies in the Lebanese government tried to challenge some of the privileges it enjoyed as the force which helped drive Israel out of south Lebanon.

The new political arrangement in Lebanon, symbolized by the election of Michel Suleiman as president on Sunday, tilts the balance of power significantly in Hezbollah’s favor and underscores its central role in Lebanese politics.

Bush maintained his confrontational attitude towards Iran and Syria, saying: “Every peaceful nation in the region has an interest in stopping these nations from supporting terrorism.”

On the same day of the Lebanese agreement, Israel and Syria disclosed they had held indirect talks mediated by Turkey -- the closest they have come to serious negotiations since talks brokered by the United States collapsed in 2000.

The Bush administration walked away from high-level contacts with the Syrians after the assassination of former Lebanese Prime Minister Rafik al-Hariri in 2005. The United States says it suspects Syria of the killing, a charge Syria denies.

Bush’s audience included Gulf Arab officials whose governments have maintained working relations with Iran, defying to some extent Washington’s attempts to isolate Tehran.

Years of U.S. policy, including sanctions and a debate about the possibility of military strikes, have not persuaded Iran to abandon its ambitions to produce its own enriched uranium.

DIALOGUE WITH IRAN

Egyptian Foreign Minister Ahmed Aboul Gheit said that in his talk about Iran’s nuclear program Bush had again failed to address the nuclear activities of Israel. It is widely believed to have some 200 nuclear warheads.

Mohamed ElBaradei, Egyptian head of the International Atomic Energy Agency, told the same conference in Sharm el-Sheikh that Washington was maintaining double standards on nuclear weapons, and dialogue with Iran was the right approach.

Bush argued that “terrorist organizations and their state sponsors” are the main opponents to democracy in the Arab world.

“(They) know they cannot survive in a free society, so they create chaos and take innocent lives in an effort to stop democracy from taking root,” he said.

But civil society and human rights groups say that governments friendly towards the United States are some of the most determined obstacles to democracy, repressing peaceful Islamist groups which seek power through democratic elections.

In Egypt, for example, where Bush was speaking, the authorities prevented the non-violent Muslim Brotherhood from standing in local elections and some parliamentary elections over the past two years, ignoring occasional U.S. criticism.

Without naming names, the U.S. president did criticize his friends in the Arab world for holding political prisoners.

But five years after Bush launched his campaign for political change in the Middle East, Arab leaders have learned that the price for ignoring him on human rights is low.

“We’ve heard these speeches before,” said an Egyptian official who asked not to be named.

In Cairo three years ago U.S. Secretary of State Condoleezza Rice said the time had come for the rule of law to replace emergency decrees. But this week the Egyptian parliament is expected to extend for another year a system of emergency law that has been in force for more than 26 years.