NEW YORK, Sept 20 (Reuters) - Rich Arab nations should support the Middle East peace process
by boosting financial aid to the cash-strapped Palestinian Authority
as it prepares for statehood, Palestinian and Norwegian officials said on Monday.
Palestinian Prime Minister Salam Fayyad
, speaking after a meeting with Gulf Arab ministers, said the Palestinian Authority still needed about $500 million this year to fund everything from salaries to infrastructure.
What we're looking for now, in the course of what remains in this year, is to find about half a billion dollars that we need in order to balance the books, Fayyad told journalists after the meeting on the margins of the U.N. General Assembly in New York.
We're hopeful that we really get the support and assistance that we need.
U.S. officials have called for Arab nations to step up their economic support of the Palestinian Authority.
The World Bank has warned that the authority faces a financing shortfall this year of up to $400 million and could remain dependent on foreign aid unless it can attract investment and find sustainable ways to grow its economy.
As the authority seeks to cut costs and improve tax collection, Fayyad has said he hopes by 2013 his government will not be forced to rely on foreign aid to finance its budget.
Foreign Minister Jonas Gahr Stoere of Norway, which chairs the donors group, said the need for support had increased with the recent launch of U.S.-backed peace talks between Israel
and the Palestinians, which U.S. President Barack Obama wants to yield a deal for a full Palestinian state within one year.
We want this state to hit the ground running. That capacity is almost there, Stoere said.
We really expect the Arab and Gulf states to live up to their pledges. Time is short. We will intensify our efforts to communicate those figures, he said.
Stoere said the Palestinian Authority's efforts both to improve fiscal management and boost basic security were having a real impact on the ground -- a fact he said should persuade Israel to further reduce restrictions on Palestinian movement and trade in the Gaza Strip
This is clearly on our agenda, he said, adding that the World Bank and others concurred that loosening restrictions would bolster the emerging Palestinian economy.
Fayyad said despite the financial crunch the Palestinian Authority was working hard to build up its basic governance capacity in order to take the reins fully if a comprehensive peace deal can be struck with Israel.
We need to really push along, Fayyad said. We are well positioned for the establishment of a state of Palestine at any point in the near future.