Page last updated at 11:33 GMT, Wednesday, 21 May 2008 12:33 UK

Palestinians bidding for business

Palestinian prime minister Salam Fayyad speaks in the West Bank city of Ramallah
Mr Fayyad hopes to persuade people to invest in the Palestinian territories

The Palestinian territories are holding their biggest ever economic conference in the town of Bethlehem.

It is the initiative of Palestinian Prime Minister Salam Fayyad.

He is hoping to convince business leaders that after years of stagnation, the West Bank and Gaza are now good places to invest.

The three-day conference has attracted over 1,000 business people, bankers and government officials from across the Middle East and beyond.

The BBC's Aleem Maqbool, in Ramallah, says that Mr Fayyad does have some cause for optimism - his own relations with the international community have helped bring in donor money.

One key area where progress is hoped for is home-building. There is significant demand for new housing, and announcements on construction are expected at the conference.

Conference organiser Hassan Abu Libdeh has said there will be an announcement on Thursday about Saudi investment in a $250m (125m) construction project in the West Bank.

US encouragement

But, our correspondent adds, even Mr Fayyad would have to admit it is a far from perfect business environment, with economic development in the region being inextricably linked to the conflict with Israel.

Sanctions imposed in the Gaza Strip have meant that raw materials and equipment cannot get into Gaza, while produced goods cannot get out.

Israeli officials say the embargo is in response to almost continuous rocket fire from the territory onto neighbouring Israeli towns and villages.

On Sunday US President George W Bush urged Arabs across the Middle East to "invest aggressively" to help those in the Palestinian territories.

Israeli officials say they support the conference, and have issued hundreds of visas and permits to those attending.

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