United Nations Middle East envoy, Terje Roed-Larsen, has given the UN Security Council an upbeat assessment of progress towards the implementation of the roadmap for peace between Israelis and Palestinians.
But he warned that both sides needed to take steps to build trust and confidence.
The Palestinians, he said, had a duty to take on security responsibilities in areas where they have resumed control.
And he urged the Israelis to do more in terms of releasing Palestinian prisoners and improving the daily living conditions of Palestinian civilians.
Every month, the UN Security Council gathers for an update on the Middle East peace process.
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Both sides need to take steps that build trust and confidence
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Diplomats have become used to the ever-increasing toll of those killed on both the Palestinian and the Israeli side, but they watch closely to see if there is any glimmer of hope - of progress towards a peaceful settlement.
Mr Roed-Larsen told the council that since his last briefing, progress towards peace had been encouraging.
He commended both sides for what he called their "courageous pursuit" of the peace process, but he urged them to go even further.
"I would like to take this opportunity to emphasize the pressing need to create and build momentum. Both sides need to take steps that build trust and confidence," he said.
Warning over barrier
The Israelis, he added, could build real trust and confidence by releasing more Palestinian prisoners and he urged the Palestinians to take on the responsibility of providing security in areas of the Gaza Strip and West Bank where Israeli forces had recently withdrawn.
He pointed out that one area of continuing concern was the lack of access for humanitarian agencies trying to work in Palestinian areas.
He also urged the Israeli Government to end the construction of a wall separating Israeli and Palestinian areas.
Its construction, he said, was a unilateral act that would make it more difficult to create a viable Palestinian state.