Delegations from the world's powers met in Paris to agree on an aid package worth billions of dollars to stabilize the Palestinian economy and give political impetus to the newly re-launched peace process with Israel.
The one-day Paris conference was attended by 90 international delegations, making it the biggest of its kind since 1996.
Palestinian President Mahmoud Abbas hopes to win pledges for $5.6 billion – the sum he says is needed to underwrite a Palestinian state and stave off severe hardship in the territories.
The amount the Palestinians needed for 2008 was "around $1.6 to $1.7 billion," said US Secretary of State Condoleezza Rice, adding the US will shoulder one third of the financial burden, while the German government, meanwhile, promised $200 million by 2010.
"This is an historically large figure. I think this is the largest assistance package that we have ever done for the Palestinians," a senior US official said.
Foreign Minister Tzipi Livni headed the Israeli delegation to the Conference of Donors. Israel was not named an official member of the conference, but it presence, Ynet was told, helps legitimize the process.
"The creation of a Palestinian state and the modernization of the Palestinian economy are in the interests of Israel, just as stopping terrorism is in the interests of the Palestinians," she said.
French President Nicolas Sarkozy opened the conference, with Abbas at his side: "It is urgent to stabilize the Palestinian economy and implement measures on the ground that will improve the daily lives of Palestinians," said Sarkozy.
Some 70% of the pledged funds will go to stabilizing the Palestinian budget, and the rest on development projects.
Conference members are further expected to urge Israel, which operates 550 checkpoints in the West Bank, to gradually lift restrictions on movement between Palestinian towns and villages, while asking the Palestinians for a big push to improve security conditions.
AFP contributed to this report