The Palestinian Authority on Sunday signed an agreement with the World Bank and other donors for $64 million to help it prepare for statehood.
World Bank official Shamshad Akhtar says the goal was to boost Palestinian Prime Minister Salam Fayyad's plan to set up institutions for a state within two years, though talks with Israel are stalemated.
The World Bank will administer the project, with part of the funding coming from Sweden, Denmark and the German development bank.
A World Bank delegation visiting the West Bank and Gaza Strip will also look for ways to ease entry of construction materials into Gaza.
Last winter Israel launched a three-week military offensive there to stop daily rocket fire, causing widespread destruction. Israel refuses to let building materials into Gaza, fearing they would end up in the hands of Gaza's Hamas rulers.