Meeting of the donor coordination group for Palestine (AHLC)

'Reports from the World Bank, the International Monetary Fund, the UN and the Office of the Quartet Representative show that the situation is steadily deteriorating. The lack of political progress and the economic downturn are threatening stability in the region and undermining security for both peoples,' said Mr Brende.

The Palestinians said they would continue their reform efforts and strengthen the institutions that have been built up through the Oslo Process over the last two decades. The Israelis said they would implement measures to boost economic growth and development in the West Bank, and increase the pace of reconstruction in Gaza. The Israelis and Palestinians also emphasised that the goal is still two states living side-by-side in peace and security. Both parties maintain that they wish to resume genuine negotiations.

Strong signal

'These are important commitments, and a strong signal to the donors,' said Mr Brende. 'We all know that economic growth and development will not in themselves bring about peace, and are no substitute for a political process to resolve the conflict. However, improvements on the ground are necessary, and could pave the way for new negotiations.'

The objective of the AHLC is to coordinate assistance and monitor developments. The reports submitted to the meeting show clearly that the level of assistance is now falling, and must be increased in order to meet the needs. Norway promised to follow up the parties' request to revitalise local structures for cooperation between the parties and coordination with the donors.

'The donors cannot let the parties down now,' said Mr Brende. 'I will follow this up with my colleagues, and remind them that we cannot allow the Palestinian institutions to disintegrate. The donors must also deliver on their pledges for the reconstruction of Gaza.

• See also the Chair's summary