Canada is committing $300 million over the next five years to help the Palestinian government, led by President Mahmoud Abbas, achieve success in its negotiations for peace with Israel.
Foreign Affairs Minister Maxime Bernier made the announcement Monday at the Conference of Donors for the Palestinian Territories in Paris.
"Our funding is not unconditional," said Bernier. "We will need to see demonstrable progress in negotiations by both sides, as well as progress in Palestinian democratic reforms."
Bernier said the $300 million will be used to help build "security, governance and prosperity."
U.S. Secretary of State Condoleezza Rice pledged $555 million for 2008. However, about $400 million is yet to be approved by the U.S. Congress.
The EU said it would give $650 million in 2008 and Norway pledged $140 million a year for three years. Britain, France and Germany announced a combined $1.08 billion for three years.
In total, Palestinian Prime Minister Salam Fayyad is seeking $5.6 billion, from 2008 to 2010, from the 90 countries gathered at the conference.
Michael Hudson, director of Georgetown University's Centre for Contemporary Arab Studies, said a total of $7.4 billion has been pledged -- surpassing the target.
"Once you get that good news, you have to ask, 'Where is it going to be used, and how will it be used?'" he told Â鶹´«Ã½net on Monday.
There will be less benefit from the money than expected, he said. Seventy per cent of it will pay off debts incurred by the Palestinian Authority.
"That doesn't leave much for new development or infrastructure improvement," he said.
"It is likely that the bulk of it is going to go to the West Bank, and it is intended certainly politically to sort of upgrade the credibility of the Palestinian Authority president, Mr. Abbas," Hudson said.
The United States and the EU may try to limit the amount of money sent to the Hamas-led Gaza Strip, he said.
"There is a huge disconnect there when you consider there are perhaps one million Palestinians living in the strip and their condition is terrible."
Resumption of peace talks
UN Secretary General Ban Ki-moon encouraged donors to "invest now, invest generously, and remain steadfast in their financial commitments over the next 36 months.''
The conference follows the long-awaited resumption of peace talks between the Palestinian and Israeli governments last month in Annapolis, Maryland.
"The Israelis and Palestinians have committed to negotiations to be concluded in one year. While ambitious, I believe this is attainable," said Bernier.
On Monday, Abbas demanded, "without exception," that Israel:
- remove roadblocks quickly
- stop building its separation barrier in the West Bank
- freeze settlement expansion
Norwegian Foreign Minister Jonas Gahr Stoere also pressured Israel to ease Palestinian travel restrictions in the West Bank and Gaza.
"It is hard to see how the Palestinians can make reasonable progress without improved access in their territories,'' said Stoere, a conference co-chairman.
Israeli Foreign Minister Tzipi Livni said the Palestinian reform plan was "a serious effort to build the basis for a responsible Palestinian state that the Palestinian people so deserve and that peace so needs."
She said Israel was committed to its part in the peace negotiations, "including in relation to settlement activities.''
Aside from economic aid, leaders are also discussing how to deal with the situation in Gaza -- where Hamas forces now run the territory.
With files from The Associated Press
