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France to host Mid-East aid talks Paris hosts Mid-East donor talks
(about 8 hours later)
The French government is hosting an international aid conference aimed at reviving the Palestinian economy. Officials from more than 60 countries are meeting in Paris to discuss an aid package for the Palestinians, in the biggest meeting of its kind since 1996.
The goal is to mobilize financial and political support for the Palestinian Authority to enable it to build the foundations for a viable state. Palestinian Prime Minister Salam Fayyad is seeking $5.6bn (£2.8bn) over three years to help lay the foundations for a viable Palestinian state.
But the worsening economic crisis in the West Bank and Gaza Strip threatens to undermine all of the hopes of peace. The European Union pledged $650m (450m euros; £320m) of aid in 2008.
The one-day meeting in Paris follows last month's US-sponsored Middle East conference in Annapolis, Maryland. The one-day donors' summit follows last month's US-sponsored Middle East talks in Annapolis, Maryland.
At Annapolis, Israeli Prime Minister Ehud Olmert and Palestinian Authority President Mahmoud Abbas pledged to seek a peace deal before the end of 2008. The new envoy of the Quartet of Middle East peace negotiators, former UK Prime Minister Tony Blair, and US Secretary of State Condoleezza Rice are among those attending the conference.
US President George W Bush also pledged to fully support the process throughout his last year in office.
Humanitarian crisisHumanitarian crisis
The economic well-being of the Palestinians is widely seen as an essential pre-condition for the building of a successful Palestinian state. French President Nicolas Sarkozy opened Monday's talks near the Arc de Triomphe, at which UN Secretary General Ban Ki-moon and Russian Foreign Minister Sergei Lavrov are also present.
November's Annapolis talks saw Israel and the Palestinians relaunch negotiations that had been frozen for seven years and agree to seek a peace deal before the end of 2008.
Gaza is dependent on aid from the international community ICRC demands actionMechanics of peace talksAnalysis: After AnnapolisGaza is dependent on aid from the international community ICRC demands actionMechanics of peace talksAnalysis: After Annapolis
Only if there can be an economic revival, it is argued, can the ground be prepared for the potential compromises that might be necessary. But the worsening economic crisis in the West Bank and Gaza Strip threatens to undermine the declared aim of creating a Palestinian state within the next 12 months.
But the economic situation in the West Bank and, especially, in the Gaza Strip is deteriorating markedly and aid agencies are warning of disaster. BBC Middle East Editor Jeremy Bowen says the faint hopes raised in Maryland are already fading.
The International Committee of the Red Cross (ICRC) speaks of a worsening humanitarian crisis and describes the situation in the Gaza Strip as "alarming". Israel returned from Annapolis and promptly announced plans to expand a settlement on occupied land between Jerusalem and Bethlehem, our correspondent says.
Mr Abbas is expected to ask for $5.6bn (£2.8bn) in urgent additional funding over the next three years, primarily from Arab states, 70% of which will be used for budget support and the rest for development projects. Settling people on occupied land is illegal under international law.
His Prime Minister, Salam Fayyad, will set out a reform and development programme extending out to 2010. The World Bank and several aid organisations have said that until Israel lifts its system of restrictions on the movement of Palestinian people and goods, giving more money will not rebuild the Palestinians' economy.
Israeli reluctance The US has announced it intends to pledge about $555 million (£275m) for 2008 to the Palestinian Authority.
A whole range of projects are already being planned; the process boosted by the work of the new envoy of the Quartet of Middle East peace negotiators, former UK Prime Minister Tony Blair. But many analysts fear that unless Washington is ready to take a much tougher line with the Israeli government, then even a limited economic upturn in the West Bank may prove impossible to achieve.
But economics, politics and security are inextricably bound together. Economic lifeline
Aid organisations warn that more money will be meaningless unless there is a rapid change in the restrictions on movement imposed by Israel on the West Bank and the ending of the effective blockade of the Hamas-administered Gaza Strip. The Palestinian prime minister has said he wants 70% of the aid to go directly to slashing his huge budget deficit.
Israel shows little enthusiasm for easing such restrictions. He is also presenting a three-year reform plan, with pledges to slash government spending by trimming the bloated public payroll.
And recently approved plans for new building work in Israeli-occupied East Jerusalem have drawn angry protests from the Palestinians and a modest rebuff from the US. The Palestinian development plan formally also includes Gaza, but analysts say most of the aid is expected to go to the West Bank, which is controlled by moderate Palestinian President Mahmoud Abbas.
Many analysts fear that if Washington is not ready to take a much tougher line with the Israeli government, then even a limited economic upturn in the West Bank may prove impossible to achieve. Gaza has been virtually cut off from the world since Mr Abbas's rivals in the Islamic militant group Hamas seized control of the territory by force in June.