US says Israelis, Palestinians aim for final deal

UNITED NATIONS (AP) — Israelis and Palestinians have agreed to intensify peace talks aimed at reaching a final agreement, not an interim accord, U.S. Secretary of State John Kerry said on Wednesday.

The two sides met on the sidelines of the United Nations General Assembly in New York at a conference of donors looking for ways to revive the fragile Palestinian economy.

Speaking before the closed-door meeting known as the Ad Hoc Liaison Committee, Kerry said the goal of newly restarted talks between Israel and the Palestinians is a "final status agreement," not an interim one.

On Tuesday, President Barack Obama met Palestinian Authority President Mahmoud Abbas, and he plans to meet with Israeli Prime Minister Benjamin Netanyahu next week in Washington.

Both sides expressed their commitment to the peace talks at the Ad Hoc meeting and noted the determination of the U.S., and Kerry in particular, to move the process along.

"This is a 50-year-old conflict, and it's inevitable that we have to find closure to it," Palestinian Finance Minister Shukri Bishara said. "It's impossible to continue as is."

The new finance minister called Wednesday's economic talks "very, very successful."

The donor meeting asked Israel to ease some of the restrictions that have hurt employment, trade and other crucial areas of the Palestinian economy.

An International Monetary Fund staff report on West Bank and Gaza economies released last week said extensive Israeli restrictions on movement and access should be eased and eventually removed.

The donors on Wednesday also asked the Palestinians to rein in expenditures and take steps to "develop a business-friendly environment." They are facing a $350 million financing gap projected for this year.

The Palestinians depend heavily on aid from donors — about $1.3 billion this year, or the equivalent of nearly 12 percent of annual gross domestic product. But the aid has been falling in recent years, along with optimism over peace.

Both sides appeared unusually upbeat after Wednesday's meeting, despite the challenges. And they acknowledged they have little time to be otherwise.

"We are particularly conscious of the fact that we can't build a state that almost totally depends on foreign grants," Bishara told reporters after the meeting.

But he stressed: "We have to ensure that one state is close in its standard of living to the other state." The income gap between Israel and the Palestinians remains vast.

Israeli Cabinet minister Yuval Steinitz called the meeting "positive" and said a "strong, viable Palestinian economy" helps to create a better political climate — as long as Israeli security needs are not damaged.

Both sides have resumed dialogue between finance ministers, Steinitz said. Other moves include another 5,000 employment permits for Palestinians and allowing more water and construction and cellular equipment into the Gaza Strip.