You be the judge! YouTube video is here. Selected frame grabs are below. At 51 seconds in, Bush has a watch. At 56 seconds he still has a watch. At 57 seconds hands are grabbing at his wrist. His hands are then obscured for a few seconds, and at 1:05 he doesn't have a watch.
Bruce Schneier has collected three different denials that Bush was robbed. Denial 1: At about the one minute mark Bush put his hands behind his back so a bodyguard could remove his watch. Denial 2: It fell off. Denial 3: Bush took it off himself.
Maybe. But it would be a lot funnier if an Albanian pickpocket managed to rip off the president of the United States. Keep an eye on EBay.