Ninety international delegations began meeting Monday in Paris to agree on an aid package worth billions of dollars to stabilize the Palestinian economy and shore up the peace process with Israel.
French President Nicolas Sarkozy opened the one-day Conference of Donors for a Palestinian State, the biggest of its kind since 1996. Sarkozy pledged 300 million dollars in French aid for the Palestinians.
Palestinian president Mahmoud Abbas hopes to win pledges for 5.6 billion dollars (3.85 billion euros), 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," U.S. Secretary of State Condoleezza Rice told journalists accompanying her on the plane to Paris.
Sources in her delegation said the United States was prepared to shoulder one third of the financial burden in 2008 by forking up 550 million dollars. The German government, meanwhile, promised 200 million dollars by 2010.
Among the delegates gathering at a conference centre by the Arc de Triomphe are U.N. Secretary General Ban Ki-moon, Russian Foreign Minister Sergei Lavrov and former British Prime Minister Tony Blair.
Foreign Minister Tzipi Livni represents Israel, which is under pressure to lift restrictions on freedom of movement in the occupied West Bank and Gaza Strip to allow the Palestinian Authority's plan to take shape.
Speaking to AFP on the eve of the meeting, Livni said that "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."
At the U.S.-sponsored meeting in Annapolis, Maryland last month, Israel and the Palestinians pledged to seek a peace deal by the end of next year, re-launching negotiations frozen for seven years.
The pledges will be in support of a plan draw up by Salam Fayyad, the economist whom Abbas appointed as Palestinian prime minister when the Hamas radical Islamist group seized armed control of the Gaza Strip.
Some 70 percent of pledged funds will go to stabilizing the Palestinian budget, and the rest on development projects.
The United States praised Abbas's government before the opening of the conference.
"You have the best Palestinian government since Oslo. This is not only the best Palestinian government, it is also the most moderate in the Arab world," said the senior U.S. official.
Conference members are 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.
The senior U.S. official said Rice may also publicly push Israel to halt construction of new Jewish settlements in the West Bank