TONY BLAIR called for fresh efforts to find a Middle East peace settlement yesterday in the wake of Yasser Arafat's death.

The Palestinian leader's body was on the way to Egypt last night from the French hospital where he died early yesterday, aged 75.

Mr Arafat will be accorded a military funeral in the Arab state today.

He will then be buried at the Ramallah compound, in the occupied West Bank, where was kept a virtual prisoner by the Israelis for two-and-a-half years.

Mr Arafat had been in a coma since November 3, and on Tuesday suffered a brain haemorrhage.

Although not unexpected, his death has caused uncertainty in the region and reverberated around the world.

Mr Arafat personified his people's struggle after 40 years at the forefront of the Palestinian cause.

Displays of grief and volleys of gunfire were heard from Gaza to the Palestinian refugee camps in Lebanon and Jordan.

The Israelis, who saw him as a terrorist, said his death marked a new chance of peace.

The Prime Minster was expected to urge US President George Bush to make new efforts towards a deal when the pair met in Washington last night.

In a TV interview before setting out, he hailed Mr Arafat as an "icon for the Palestinian people".

He said: "There is no doubt about that at all. Whatever differences we had with him, I think it is right to recognise that.

"I think the most important thing is to make sure we reinvigorate the peace process because there is misery for Palestinians, and there is misery for Israelis who suffer terrorist activity.

"And in the meantime we have got a situation where it is a huge source of discontent and problem within the world, so it is important we deal with it."

It has not been made clear what illness the Palestinian leader was suffering from, though doctors ruled out cancer and poisoning.

In his final hours, he had brain damage and kidney and liver failure.

Foreign Secretary Jack Straw will attend his funeral on behalf of the Government.

Mr Straw called Mr Arafat "a towering figure not only in the Palestinian world but in the Arab world, and it is difficult to imagine the Middle East without him".

He also said: "There has to be a stronger level of communication between the Palestinians and the Israelis, a greater level of trust, and more effective security arrangements by the Palestinian Authority."

Mr Blair's early invitation to the White House so soon after the US elections is a mark of the importance Mr Bush places on his relationship with his main ally in the Iraq War.

The situation in Iraq is certain to top the agenda for their two days of talks, taking place against the backdrop of a military assault on Fallujah by US and Iraqi troops.

Speaking before his departure for Washington yesterday afternoon, Mr Blair said he regarded it as part of the job of the Prime Minister to maintain close relations with whoever is in the Oval Office.

He said: "The relationship between Britain and the US is fantastically important.

"It is a huge strength of this country to have that relationship, and if we are confronting this threat of terrorism in the world, it is important we confront it together.

"I think there always is and always should be a situation in which the British Prime Minister and the American President get on well together. I regard it as part of my job."

The Washington trip is difficult for Mr Blair, because aides are aware that his links to Mr Bush are unpopular with many British voters and controversial with his own backbenchers.

Labour activists believe Mr Blair has not secured enough concessions from the US President in return for his support over Iraq, particularly on issues such as the Middle East and climate change