$1.4bn pledged to bolster Palestinian economy

INVESTMENT PLEDGE: Former British prime minister Tony Blair (L) and Palestinian prime minister Salam Fayyad speak on the second day of the Palestine Investment Conference in the West Bank city of Bethlehem. (Getty Images)

Private investors at a Bethlehem conference pledged to pump $1.4 billion into Palestinian businesses to bolster the economy as President Mahmoud Abbas holds statehood talks with Israel.

Prime Minister Salam Fayyad said on Friday he expected the investment in local business projects - most of which are in the Israeli-occupied West Bank and cover sectors ranging from real estate to technology - to create up to 35,000 jobs.

Much of the money was pledged by foreign investors, many from Arab countries awash with oil wealth. It comes above a $7.7 billion in aid promised by international donors in Paris in December as a way of bolstering Abbas.

"The message of this conference is that we are determined to change this miserable situation into a better reality, a better tomorrow, void of checkpoints, settlements and walls," Fayyad told a news conference in Bethlehem, referring to obstacles Israel maintains in the West Bank.

Abbas and Fayyad had hoped this week's conference in Bethlehem would attract as much as $2 billion for more than 100 projects in the West Bank and the Hamas-run Gaza Strip.

But officials from the World Bank and the Palestinian government - including Fayyad himself - have stressed that while investment in the Palestinian territories is crucial, the economy will not flourish unless Israel eases restrictions imposed after the outbreak of an uprising in 2000.

Israel says its network of checkpoints and roadblocks in the West Bank are needed to keep suicide bombers away from its cities but Palestinians call them collective punishment and say they hamper trade.

The US has been pressing Israel to remove some of the restrictions but with little success.

French Foreign Minister Bernard Kouchner told the conference on Friday Israel must do more to ease restrictions in the West Bank and called Jewish settlement building an "impediment" to peace and economic development.

Hundreds of potential investors from the private sector attended the conference and Fayyad said he hoped Israel, which granted permits for most invitees, would prove as flexible in the future.

The $1.4 billion included up to $550 million from major Arab investors for a new West Bank town and a shopping complex. About $650 million would go to technology projects and $100 million on manufacturing.

Fayyad did not say which specific projects attracted funding, but local entrepreneurs had showcased more than 100 ideas including a West Bank Wimax network and a luxury spa hotel in Bethlehem, which as the traditional birthplace of Jesus, attracts many Christian pilgrims.

Most of the cash would go to the West Bank, where Abbas holds sway, although a small amount would go to technology projects in the Hamas-controlled Gaza Strip, whose economy is in meltdown due to an Israeli-led blockade.

Fayyad, a former World Bank economist who was appointed last year after Abbas dismissed Hamas Islamists from government in a move that ended trade sanctions, said pledges made at the conference were just "the starting point".

"We are throwing a party and the whole world is invited," Fayyad said at the end of the three-day conference. (Reuters)

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