 |  Mr Bush wants a peace deal agreed before he leaves office  |
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Speaking at a dinner for the main participants, Mr Bush however insisted that Israeli and Palestinian leaders were committed to making them.
He was speaking on the eve of the most important Middle East talks in years.
More than 40 organisations and countries, including Saudi Arabia and Syria, are attending the conference.
Observers say the fact that the summit is being hosted by the US and has attracted the participation of Arab states like Saudi Arabia and Syria that do not recognise Israel, are critical to chances for success.
The Bush administration hopes that the meeting in Annapolis, Maryland, will kick-start the first Israeli-Palestinian peace talks in seven years - a programme of meetings over the next year or so, which will lead to a Palestinian state.
Before arriving in Annapolis, Saudi Foreign Minister Prince Saud al-Faisal was quoted by Saudi-owned Asharq Al-Awsat newspaper as saying that the Bush administration had promised that the negotiations would be completed within a year
However, correspondents say expectations for Tuesday's meeting at the naval academy in Annapolis are modest.
Wider tensions
BBC Middle East editor Jeremy Bowen in Washington says there are a number of issues that could scupper any chances of a deal - in particular the absence of Palestinian faction Hamas, which is designated a terrorist organisation by the US, the EU and Israel.
Hamas controls the internal affairs of the Gaza Strip and says it will not be bound by anything decided in Annapolis.
Our correspondent says the dynamic power of the Israeli settlers on occupied Palestinian territories is also a thorny issue.
In Jerusalem, thousands of Israelis gathered at the Western Wall on Monday to protest against the conference, with Israeli opposition leader Benjamin Netanyahu labelling the meeting "a continuation of one-sided concessions".
The wider tensions in the Middle East are also a concern, with many fearing that problems with Iraq, Iran and Lebanon could derail any peace process, our correspondent says.
Hands-on approach
At the formal welcome dinner, hosted by US Secretary of State Condoleezza Rice in Washington, Mr Bush said Palestinians and Israelis shared a "common goal: two democratic states, Israel and Palestine, living side by side in peace and security".
Mr Bush made his own personal commitment to a peace process from which correspondents say he has appeared disengaged for much of his presidency.
Israeli Prime Minister Ehud Olmert and Palestinian Authority President Mahmoud Abbas held separate meetings with Mr Bush in the White House on Monday. 
The three will gather together at Annapolis later on Tuesday, each making a speech before the negotiations, which also involve members of the Middle East Quartet, UN Security Council and G8 industrialised nations, get under way.
Our correspondent says that both Mr Abbas and Mr Olmert believe they are not going to get a better chance to forge a peace, in part because of their own political weakness and in part because of the way the Middle East is changing.
On Monday, Mr Olmert told reporters the "international support" provided by participants was a crucial factor in his optimism.
"This time it's different because we are going to have lots of participants in what I hope will launch a serious process of negotiations between us and the Palestinians," Mr Olmert said.
But Mr Olmert also cautioned that no peace deal could be agreed without the halting of rocket attacks into Israel from Gaza.
For his part, Mr Abbas praised the initiative but said talks would have to address the obstacles to Palestinian statehood - the "permanent-status issues" - that have felled previous attempts at peace negotiations.
"We have a great deal of hope that this conference will produce... expanded negotiations over all permanent-status issues that would lead to a peace agreement between Israel and the Palestinian people," he said after meeting Mr Bush.
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