PARIS, Feb 4 (Reuters) - The Palestinian Authority will ask for substantially less foreign aid from a donor conference this year than in the past and hopes to wean itself off budget assistance by 2013, Prime Minister Salam Fayyad said on Friday.

Fayyad also said he wanted June's donor meeting to be accompanied by progress in the process of establishing statehood for the Palestinian entity by the end of 2011.

Donor countries will meet in Paris to agree on further funds for the authority after $7.7 billion was pledged at a first conference in 2007 to help the Palestinian budget and projects or for humanitarian aid.

In terms of the external assistance that we will expect ... it will be substantially less than what we required until 2010, Fayyad told a diplomatic forum in Paris.

The authority would ask for a similar level of development aid as it obtained at the 2007 conference but less money from abroad to fill its budget shortfall, he said, adding: We hope to eliminate budget assistance by 2013.

Last September, Washington relaunched direct peace talks between Israel and the Palestinians, only to see them grind to a halt three weeks later when Israel's partial freeze on building in Jewish settlements in the occupied West Bank expired.

Fayyad connected the donors' conference with the political process. When we meet it will have to be against the backdrop of the expectation of the imminent formation of the Palestinian state. If not we don't want a donor conference, he said.

Fayyad, a former World Bank economist, said in January dependence on foreign aid should fall to less than $1 billion in 2011, from $1.2 billion in 2010 and from a level of around $2 billion annually when he took office in 2007.

Financial support from the United States, the European Union and Arab states allows the Authority to pay around 150,000 officials, teachers and members of its security forces.