The international community is being asked to take a very expensive leap of faith in approving a huge new injection of aid to the Palestinians.
Even if donor countries at Monday's pledging conference in Paris meet the request for an unprecedented US$5.6 billion (3.86 billion) over three years, it may still not be enough to stem the economic decline in the West Bank and Gaza.
The Palestinian economy can only recover if Israel eases restrictions on Palestinian movement, the World Bank says, but a reluctant Israel, putting its security first, has given no guarantees.
It's simple math for clothing wholesaler Samer Zawiyani, from the West Bank city of Nablus. Shipping costs eat up most of his profits because his trucks wait for hours at checkpoints as soldiers search for bombs. "We don't need the billions of the world. We need Israel to remove the checkpoints," he said.
Aid and freer movement are viewed as essential if the new U.S.-led push for an Israeli-Palestinian peace deal by the end of 2008 is to be spared a serious psychological blow. Negotiations resumed last week, after seven years of diplomatic deadlock and bloodshed.
Given that choice, the representatives of 90 countries and international organizations invited to Monday's gathering are expected to come up with the money requested by the Palestinians. Among those making a pitch will be U.S. Secretary of State Condoleezza Rice and international Mideast envoy Tony Blair, the former British prime minister.
The donors say they are aware of the stakes and are urging Israel to be more flexible. "The political pressure exists, it is being exerted by the Europeans and the Americans," said Christiane Hohmann, spokeswoman for EU External Relations Commissioner Benita Ferrero-Waldner.
However, so far only Britain has said it will link disbursement to improved conditions on the ground, including an easing of Israeli restrictions and Palestinian government reform.
Palestinian Prime Minister Salam Fayyad says he is doing his best not to disappoint the donors, who have seen more than US$10 billion (6.9 billion) in aid since 1993 largely go to waste because of mismanagement under the late Yasser Arafat and years of Israeli-Palestinian fighting that destroyed much of what was built with aid money.
Fayyad, a respected economist, has won endorsements from the World Bank and the International Monetary Fund for his three-year development plan, including promises to trim the oversized public payroll and reduce hundreds of millions of dollars in utility subsidies.
The plan being presented aims to assure donors that they are not expected to prop up the Palestinian Authority indefinitely, even though the bulk of the aid, US$3.9 billion (2.7 billion), would go toward the government's budget deficit. The balance is to shift gradually to development projects, under a scenario that has Israel easing restrictions and enabling the Palestinian private sector to recover.
"Donors do not like to fund into a sinkhole," Fayyad said. "Part of our responsibility is to see that this is not the case. Is it sufficient? No. The rest depends on what Israel does and doesn't do."
The Palestinian plan formally covers both the West Bank and Gaza, territories on either side of Israel, but the focus is on the West Bank, run by moderate Palestinian President Mahmoud Abbas.
Abbas has no control over Gaza, which was seized by the Islamic militant group Hamas in June and has since been cut off from the world by Israeli and Egyptian border closures. Only basic goods are allowed in, and exports have stopped, except for a few recent shipments of flowers and strawberries.
The blockade has wiped out tens of thousands of jobs and three-quarters of Gazans now live in poverty. However, Israel says easing access is dangerous: its border towns keep getting hit by rocket fire from Gaza and the Iranian-backed Hamas continues to smuggle weapons into the territory through tunnels from Egypt.
In the West Bank, though, Abbas' security forces are trying to assert control gradually, both over Hamas loyalists and vigilante gunmen linked to Abbas' Fatah movement, and have made a strong showing in one militant stronghold, Nablus.
Attacks against Israelis emanating from the West Bank have dropped significantly.
However, Israel's closure regime, set up after the outbreak of the second Palestinian uprising in 2000, remains in place. West Bankers need hard-to-obtain permits to enter Israel, and Israel's separation barrier, about 60 percent complete, slices off nearly 9 percent of the West Bank. Hundreds of roadblocks and barriers crisscross the remainder of the territory, making internal travel and trade difficult.
Israel says it supports the donors' efforts and understands Abbas' concerns, but cannot be rushed.
"Israel will work in coordination with the Palestinian Authority on issues like roadblocks," said government spokesman Mark Regev. "If Israel were to redeploy in an irresponsible manner, this would create a vacuum for extremists to enter, and this is in no one's interest."
Former Deputy Defense Minister Ephraim Sneh acknowledged that Abbas' forces are making progress, but said it is not enough. Nablus, he insisted, remains a "laboratory for suicide bombers."
Yet the roadblocks also make life miserable for ordinary Palestinians and heighten resentment of Israel.
The oasis town of Jericho used to profit handsomely from tourists. But nowadays a Palestinian family must think twice about visiting there, lest they be trapped at roadblocks.
Last week Tunisian singer Saber el-Rubai gave a rare concert in Jericho, saying he wanted to convey a sense of normalcy to people worn out by conflict. About 11,000 people attended. But on the way out of town, hundreds of their cars were backed up at a checkpoint. Soldiers had opened a second lane to speed passage, but insisted on the usual ID checks.
The World Bank acknowledges what it says are Israel's legitimate security concerns, but says the restrictions also exist to protect Jewish settlers in the West Bank "at the expense of the Palestinian population."
Economists say that without the violence and closures of the past seven years, Palestinian gross domestic product could now be double its current US$4 billion (2.76 billion) and make them far less dependent on aid.
Blair has taken a step-by-step approach, winning Israel's approval for four economic projects, including two West Bank industrial parks, that he hopes will create jobs for thousands of Palestinians.
The cost of failure is high. Palestinian per capita income is only 60 percent of what it was in 1999, and a further economic decline would weaken Abbas at the expense of Hamas, even in the West Bank.
For the donors, the choices are clear, said Joel Toujas-Bernate, head of the IMF in the West Bank and Gaza. "They don't really have a choice but to pledge as needed, but also to try to encourage the Israeli government to do its part."
