Palestinian economy is path to peace: Brown

BETHLEHEM (AFP) - British Prime Minister Gordon Brown insisted on Sunday that increased economic investment in the Palestinian territories would be rewarded with the prize of peace in the Middle East.

On his first official visit as Premier to Israel and the occupied West Bank, and accompanied by the heads of top British firms, Brown stressed the need to boost the Palestinian economy to secure a lasting peace with Israel.

Brown visited Bethlehem for talks with Palestinian President Mahmud Abbas and Prime Minister Salam Fayyad and to urge both British and Palestinian business chiefs to work together to drag the West Bank and Gaza Strip out of poverty.

He promised further economic aid to the Palestinians, aimed at bolstering the US-backed Middle East peace process and called for a freeze on Israeli settlement building to bolster the Middle East peace process.

"We have pledged $500m for economic development in Palestine over three years to 2011," Brown said after meeting Abbas.

"I can announce today a further commitment of $60m, 30m of which we will give as direct budgetary support, bringing our total support to the Palestinian Authority this year to $175m."

In keeping with his "economic roadmap to peace," Brown pledged support for a new mortgage authority which he said would help to finance some 30,000 new Palestinian homes and generate up to 50,000 new jobs.

He called for a freeze on Jewish settlements in the occupied West Bank, echoing criticism by the United States, saying their expansion had "made peace harder to achieve."

Brown and Fayyad also attended the UK-Palestine Business Meeting, which brought together top British business chiefs such as the heads of BT, Lloyds TSB Bank and British Midland with local business leaders.

Brown told them that increasing prosperity would "make the costs of ever returning to violence so high and so unacceptable that the vast majority will not want to have anything to do with those who preach violence."

He added: "There is an economic prize before us.

"But there is also a double dividend: there is a real chance to build up not just the peace process but the ingenuity and skills and the commitment of the Palestinians to build prosperity right across the region.

"It is a challenge that if taken up can secure the greatest results of all: both prosperity and peace.

"It is a prize we have long dreamt of - it is a prize within our grasp."

Fayyad said the Palestinian economy had been "ravaged for many, many years" and was performing "way below potential."

"If it were not for those conditions of the past eight years, our economy could easily have been twice the size it is today."

Abbas thanked Brown for his support as he called on Israel to ease closures of the Palestinian territories and halt the growth of Jewish settlements.

"What is required for these investments is to assure the freedom of movement of goods and of people," Abbas said at the joint news conference, referring to Brown's economic plans.

Meanwhile, an Israeli soldier is seen shooting an arrested and bound Palestinian in the leg with a plastic bullet, in a video released by an Israeli human rights group on Sunday.

B'Tselem's footage shows the Palestinian demonstrator - identified as Ashraf Abu Rahman, 27 - with handcuffs and a blindfold, as a lieutenant colonel holds him by the arm.