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G8 backs $3bln aid plan for Palestinians

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By Crispian Balmer

GLENEAGLES, Scotland, July 8 (Reuters) - The world's industrialised nations backed plans on Friday to pump $3 billion into the Palestinian economy over the next three years as part of efforts to secure peace in the Middle East.

International special envoy James Wolfensohn, helping coordinate Israel's planned Gaza withdrawal, sold the plan to leaders of the Group of Eight (G8) nations during a three-day summit in Scotland.

"When the disengagement plan happens over the next few weeks it is essential we build the infrastructure of a state on the Palestinian side. This money can help us do this," British Prime Minister Tony Blair told reporters.

Wolfensohn, a special envoy for the "quartet" of the United States, Russia, European Union and United Nations, said last month he wanted the cash for projects that could include a seaport and infrastructure programmes in Gaza.

Faryar Shirzad, the senior U.S. negotiator at the G8 summit, said a key part of what Wolfensohn was going to do was to "widen the circle of donors, including donors in the Arab world".

"In essence it's a proposal for him to essentially work with the Palestinians to help spur the kind of economic developments and governance necessary for them to develop a capability to govern themselves and to maintain a stable Palestinian territory," he added.

Italian Prime Minister Silvio Berlusconi described the package as a type of "Marshall Plan", referring to the U.S. 1947 aid package that helped revive post-World War Two Europe.

"This concrete aid will help (the Palestinians) find jobs and create companies," he said. "This was the least that we could do ... and is a concrete incentive to boost the Palestinian-Israeli peace negotiations."

The G8 statement repeated past calls for a comprehensive resolution to the Middle East conflict, saying this was "crucial to peace in the world and prosperity in the region".

It added that a successful Israeli withdrawal from Gaza and parts of the West Bank scheduled for mid-August would re-energise the peace process.

"The government of Israel should meet its 'road map' commitments on settlements, and fundamentally ease the system of movement restrictions that prevent Palestinian economic recovery, consistent with Israel's security needs," the G8 said.

"Palestinian economic revival also requires systematic reform driven by the Palestinian Authority, which must re-establish internal law and order, and take effective action to confront terrorism," it added.

Reuters - Thomson Reuters Foundation
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