In their summit, the G8 leaders approved $3 billion in aide to the Palestinian Authority to support the economy over the next three years.

The plan was submitted to the G8 leaders who are meeting in Gleneagles in Scotland, by the international special envoy James Wolfensohn, helping coordinate the intended Israeli withdrawal from the Gaza Strip and four northern West Bank settlements.

Commenting on the pledged money, British Prime Minister Tonty Blair said, ‘When the disengagement plan happens over the next few weeks it is essential we build the infrastructure of a state on the Palestinian side. This money can help us do this.’

According to Wolfensohn the funds are needed to implement projects that could include a seaport, and infrastructure programs in Gaza.

Palestinian officials welcomed the announcement, but said the money must be disbursed quickly to help rebuild the Gaza Strip after Israel’s withdrawal from the Gaza Strip this summer. Disengagement is slated to start in mid-August.

Italian Prime Minister Silvio Berlusconi described this fund as a ‘Marshall Plan’ to help revive post-war Palestine.

‘This concrete aid will help (the Palestinians) find jobs and create companies,’ he said. ‘This was the least that we could do … and is a concrete incentive to boost the Palestinian-Israeli peace negotiations.’

On its part, the G-8 statement reiterated calls for a comprehensive resolution to the Middle East conflict, saying this was ‘crucial to peace in the world and prosperity in the region.’

The statement expressed hopes that disengagement will help reorganize the peace process.

‘The government of Israel should meet its ‘road map’ commitments on settlements, and fundamentally ease the system of movement restrictions that prevent Palestinian economic recovery, consistent with Israel’s security needs,’ the G-8 said.

‘Palestinian economic revival also requires systematic reform driven by the Palestinian Authority, which must re-establish internal law and order, and take effective action to confront terrorism,’ it added.