Brown meets Palestinian PM Fayyad

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Gordon Brown and Palestinian PM Salam Fayyad on the peace process

Gordon Brown has said he hopes Israel and the Palestinians will "overcome" the issue of settlements in the West Bank in the near future.

The UK prime minister held talks with his Palestinian counterpart Salam Fayyad at Downing Street.

He said that "everybody" thought peace was possible but added that Israel had to dismantle the settlements, which were a "blockage" to progress.

Mr Fayyad is also meeting City of London financiers for investment talks.

'Barrier'

After the Downing Street meeting, Mr Brown told a joint press conference: "One of the blockages to that (peace) is clearly the settlement issue.

"We have consistently said - and I've said this to successive Israeli prime ministers and presidents when I've met them - we've consistently seen that as a barrier to reaching the agreement that everybody thinks is possible.

"And I hope in the talks in the next few weeks and months this will be recognised as a barrier that's got to be overcome."

Mr Brown also said: "Establishing a viable Palestinian state with a stable economy and flourishing private sector is a crucial part of this process."

The trade and investment forum taking place in the City would provide a chance to explore further opportunities for development, he added.

Mr Brown said: "It will promote Palestinian economic development, it will demonstrate the resilience of the Palestinian private sector, it will show the considerable opportunities for partnerships with the United Kingdom."