Delegations from more than 60 countries were expected to offer about US$5.6 billion yesterday to help lift the Palestinian economy and underpin the renewed Middle East peace talks.
The one-day meeting was the financial sequel to the launch last month of the first peace negotiations between Israelis and Palestinians in seven years.
The talks are aimed at achieving an agreement on Palestinian statehood by the end of next year.
"To turn this dream into reality we have organized this conference in Paris," French Foreign Minister Bernard Kouchner told Europe 1 radio yesterday.
"It is not just a question of money. It is a donors conference but also a political conference," he said.
While the meeting focused on plans to boost the Palestinian economy, envoys from dozens of countries were expected to discuss outstanding contentious issues.
As delegates gathered, Palestinian negotiators said Israeli plans to build new homes on occupied land near Jerusalem could cloud the next round of peace talks, due to be held on Dec. 23.
"We need a clear-cut Israeli decision concerning this issue," Palestinian spokesman Nabil Abu Rdainah said.
US Secretary of State Condoleezza Rice said the dispute was "ever more reason that it's time to get an agreement" and appealed to both sides not to "consider every bump in the road to be a barrier.
"There is an assumption here that there is not going to be turbulence in this process. There is. I don't care how much you talk to people before, I don't care how much work you do. There will be turbulence," Rice told reporters as she flew to Paris.
Palestinian President Mahmoud Abbas on Monday called on Israel to freeze Jewish settlements "without excuses," using the high-profile of the donors' conference to deliver his appeal.
"I'll be eager to implement all our commitments under the roadmap and I expect the Israeli side to do the same, comprehensively, and without excuses, by us or by them," Abbas said.
Donor countries have been poring over a reform program drawn up by the Palestinian Authority. However, the World Bank said last week such plans would not be enough to revive the economy if Israel did not lift trade and travel restrictions.
Israel has so far balked at removing checkpoints scattered across the occupied West Bank, citing security concerns.
It has also tightened its military and economic cordon around Gaza since Hamas seized control in June, although on Sunday it allowed hundreds of Palestinians to leave Gaza to make the annual Hajj pilgrimage to Mecca, Saudi Arabia.
The political division of the Palestinian territory has further complicated the peace process, with the West Bank controlled by Abbas and Gaza ruled by Hamas.
Kouchner urged ordinary Palestinians to turn their backs on extremism and support Abbas.
"We need to show moderate Palestinians that democracy is the only solution to live in peace," he told Europe 1.
The EU yesterday promised US$650 million in donations for next year.
The US has announced it is pledging about US$555 million for next year. However, the money includes about US$400 million that the White House has already announced, but that has not been approved by Congress.
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