Building up a flourishing Palestinian economy is a crucial element in securing a lasting peace settlement in the Middle East, Gordon Brown said today.
The Prime Minister, who is hosting a Palestine Trade and Investment Forum in London, said there were "considerable opportunities" for economic partnership between Palestinians and the UK.
At a joint Downing Street news conference with Palestinian Prime Minister Salam Fayyad, Mr Brown reiterated Britain's commitment to a "comprehensive and just peace" in the Middle East.
"Establishing a viable Palestinian state with a stable economy and flourishing private sector is a crucial part of this process," he said.
He said the trade and investment forum taking place in the City would provide a chance to explore further opportunities for development.
"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," he said.
Mr Brown went on to say that Israeli settlements in the Palestinian territories remained one of the "blockages" to a lasting Middle East peace.
He has repeatedly called for settlements to be frozen and dismantled, notably in a major speech to the Israeli parliament, the Knesset, during his visit to Jerusalem in July.
Mr Brown will be holding talks with the Israeli Prime Minister, Ehud Olmert, tomorrow.
The PM said: "I think everybody now sees the contours of what a two-state solution would look like - a Palestinian state that was secure and viable economically, an Israeli state that's secure within its own borders and where its worries about peace and stability were answered.
"One of the blockages to that is clearly the settlement issue. We have consistently said - and I have said this to successive Israeli prime ministers and presidents when I have met them - we have consistently seen that as a barrier to reaching the agreement that everybody thinks is possible.
"I hope that at the talks in the next few weeks and months this will be recognised as a barrier that's got to be overcome."
Mr Brown expressed hope that the election of Barack Obama as the next US president would provide a new opportunity for the international community to come together on the Middle East peace process.
"We welcome the renewed focus on the Arab peace initiative embodied in the recent letter by 22 states calling for president-elect Obama to prioritise achieving a comprehensive peace," he said.
The Prime Minister stressed the need for progress to be made in building on the US-brokered Annapolis agreement last year.
"The UK enjoys a close relationship with the Palestinian people," he added.
"I hope today's conference will cement this and I hope in the coming days we can move further and faster towards the peace settlement that everyone wants to see happen."