A group of international negotiators says the Palestinian Authority has succeeded in building the capabilities needed to run a country _ and now the political work of a permanent peace just needs to catch up.
The Ad Hoc Liaison Committee, which met Wednesday in Brussels, cited reports prepared for it by the World Bank, the United Nations, and the International Monetary Fund as saying that the Palestinian Authority is "above the threshold for a functioning state in the key sectors they studied."
The positive assessment came despite the fact that the Gaza Strip, part of any future state, is controlled by Hamas, a rival Palestinian faction that several countries including the United States, EU and Israel consider a terrorist group.
The Islamic militant Hamas and Palestinian Authority President Mahmoud Abbas have been bitter rivals since Hamas overran Gaza in 2007.
The UN report focused on institutions and infrastructure _ aspects such as governance, human rights, education and water. "In six areas where the UN is most engaged, governmental functions are now sufficient for a functioning government of a state," the report said.
These are the sorts of capability that Palestinian Prime Minister Salam Fayyad has been trying to develop during a two-year period meant to lay the groundwork for statehood. He has been working to clean up the Palestinian Authority's financing, reform the security forces, build up a legal system, develop the economy, and build roads and other infrastructure.
He says his efforts will be complete by September.
"It is possible, with support and continued cooperation along the path to freedom, to get to the point where at long last we Palestinians are able as free people with dignity in a country of our own," Fayyad said.
He called Wednesday's meeting "a landmark event."
Participants at a press conference after the committee meeting heaped praise on the prime minister.
"It's about institution-building, so that when the state is there, the state can run. And this has been happening under the very able leadership of Prime Minister Fayyad," said Jonas Gahr Store, the Norwegian foreign minister.
Catherine Ashton, the European Union's foreign policy chief, said the EU had allocated euro300 million ($434.79 million) this year for Palestinian institution-building.
All those present at the meeting said it was time for the political track to catch up with the effort to build a viable government. The effort appeared to be place the political onus on Israel by removing the argument that the Palestinians are not ready to run their own country.
But there was scant discussion of Gaza, which is not under Fayyad's control and from which rockets are sometimes launched at Israeli civilians.
Former British Prime Minister Tony Blair, the Mideast envoy of the Quartet _ the U.S., the UN, the EU and Russia _ that is trying to help negotiate peace, said attacks on Israeli citizens needed to end. He said he hoped that, with normality and growth in Gaza, the territory and the West Bank could be reunited.
For his part, Fayyad turned aside a question about unilaterally declaring statehood in September if negotiations fail, saying he wanted real independence, not a "virtual state."
Associated Press Writer Josef Federman in Jerusalem contributed to this report