Iran, Mideast peace and democracy in the region topped the agenda for President Bush during talks Monday with ally Saudi Arabia.

Bush's first visit to the kingdom came as his administration notified Congress of its intent to sell $20 billion in weapons, including precision-guided bombs, to the Saudis. The announcement was timed to coincide with the president's arrival in the Saudi capital.

It is a pretty big package, lots of pieces, national security adviser Stephen Hadley told reporters on Air Force One.

The sale is an important part of the U.S. strategy to bolster the defenses of its Arab allies in Saudi Arabia and other oil-producing majority Sunni Muslim Gulf nations against threats from Shiite Iran. The official announcement will start a 30-day review period during which Congress could try to block the sale, which has raised concern among some lawmakers.

Saudi Arabia and other Gulf states, which have majority Sunni Muslim populations, harbor deep suspicions about Shiite Iran's apparent designs to establish itself as a major power and have reacted skeptically to the conclusions of intelligence estimate about Iran.

The president, who flew to Riyadh from Dubai on his eight-day Mideast trip, was to meet with King Abdullah. The king was expected to urge Bush to keep up the pressure on Israel to halt settlements in Palestinian territories. The administration was able to persuade the Saudis to participate in the U.S.-sponsored Mideast peace conference in Annapolis, Md., in November.

Bush also has promoted democratic principles during his trip. While Abdullah has tried to push some reforms on education and women's rights, and there have been limited municipal council elections, the king has been cautious and limited in his efforts. He apparently has been hampered by others in the royal family worried that fast changes could upset the country's conservative clerics and citizens.

The king greeted Bush at the base of the steps of Air Force One. A band played each country's national anthem as the leaders walked on a red carpet behind a high-stepping uniformed officer carrying a gold sword. In the airport terminal, the president shook hands with a long procession of robed men and military officers.

Earlier, in Dubai, Bush got a flavor of the cosmopolitan banking and business hub, whose glass skyscrapers and booming construction have turned it into the capital of Middle East bustle.

The soaring Persian Gulf city-state was Bush's second stop in the seven-state United Arab Emirates federation, following his gentle lecture on democracy in Abu Dhabi and an opulent picnic at a desert horse camp Sunday.

On a day of cultural diplomacy, Bush began with a stop at the historic home of the former ruler of Dubai, now a museum loaded with photos and artifacts of the emirate's history.

The president grinned and tapped his foot as a group of girls stepped rhythmically to Arabic music, their long hair swinging from shoulder to shoulder. The light rain that fell during Bush's arrival did not dampen the mood, as rain is considered here to be good luck during the visit of a foreign leader.

Bush then had lunch with students of the Dubai School of Government, a research and teaching institution that focuses on public policy in the Arab world. The president and his hosts sat on cushions, set in a circle, their food in bowls on the carpeted floor before them.

I'm most impressed with what I've seen here. The entrepreneurial spirit is strong, and equally importantly, the desire to make sure all aspects of society have hope and encouragement, Bush later told a gathering of entrepreneurs and others affiliated with a young leaders' group.

The session was held in a conference room high atop one of Dubai's signature buildings, a luxury hotel shaped like a tall ship sail. The Burj Al Arab occupies its own manmade island.

I also want you to understand something about America - that we respect you, we respect your religion and we want to work together for the sake of freedom and peace, Bush told the group.

Dubai, concerned about being a target for Islamic extremist terrorism that has hit other nations in the oil-rich region, has installed one of the world's most comprehensive homeland security and anti-terrorism systems. Many anti-terror analysts believe the threat in Dubai is growing - fueled by the city's image as a bastion of Western-style capitalism and nightlife, its new status as home to the world's tallest building and the frequent port calls by U.S. Navy ships.

Dubai has a powerful Iranian business community, and the West, led by the United States, is cracking down on business in and out of Iran to protest against its nuclear ambitions. Dubai is caught in the middle - eager to maintain its lucrative business with Iran, but wary of angering the United States and the United Nations.

Bush used a speech Sunday to gently nudge authoritarian Arab allies to satisfy frustrated desires for democracy in the Mideast, but he saved his harshest criticism for Iran, branding it the world's leading state-sponsor of terror.