Politics isn't just about words and ideas; it has to be about action. The recently held Palestinian donors' conference in Paris was a day when the international community collectively put its money where its mouth is and committed the funds which are desperately needed if the Palestinians are to rebuild their economy and take further strides down the road to peace.

I was in Israel and the Occupied Palestinian Territories recently and had talks with President Mahmoud Abbas and Prime Minister Salam Fayyad. The challenges they face are enormous and can only be overcome if we in the international community step up to the plate to work with them in the month ahead.

And I saw some of those challenges first-hand. I saw the real hardship that the Palestinian people endure on a daily basis - obstacles that are both physical and economic. Mothers and fathers unable to earn a living to look after their families in an environment where physical barriers imposed to ensure Israel's security, also stifle Palestinian growth and prosperity. I met one family with two daughters aged four and six. They live just 40 kilometers from the sea, but they have never seen it because they cannot travel there.

The history of the peace process has been punctuated by bloody atrocities and false dawns, but I believe that there is a case for cautious optimism as our meeting in Paris seeks to build on recent developments. The Riyadh declaration in March set the tone - reaffirming the Arab Peace Initiative and expressing the Arab League's determination to find a peaceful resolution to the conflict. At the peace conference in Annapolis, Abbas and Israeli Prime Minister Olmert took some tentative steps forward as they led their respective peoples to the negotiating table, watched and supported by representatives from the whole of the region.

Now we must strengthen the fragile progress which has been made in three distinct areas. First, I sincerely hope that other donors reward the bravery of Abbas and Olmert with substantial, concrete promises of support.

The peace process depends on an effective and functioning Palestinian Authority (PA). Fayyad has said that he will need $5.6 billion over the next three years. This request is backed by a strong, credible and costly three-year strategic framework in the form of the Palestinian Reform and Development Plan, which has been endorsed by the boards of the World Bank and the International Monetary Fund. The PA is playing its part. Donors from all countries, including Arab partners, can and must now show their commitment.

Second, the Reform and Development Plan is an impressive start on the PA's ambitious and much-needed reform program. But when I spoke to Abbas and Fayyad, they recognized that this was only the start. In order for this confidence to be maintained, the PA will have to take some difficult choices and make the hard yards, especially in the area of security.

The UK is ready to play its part in helping this happen. As well as the political support we are lending to the process, we have already pledged up to $886 million over three years to help build Palestinian institutions and revive the economy, linked to progress on the peace process. This funding will have a positive impact if there are real changes in the "facts on the ground." For example, if movement and access restrictions are not eased, then the ability of the Palestinian private sector to grow and to provide employment will be limited.

And thirdly, as President George W. Bush said in Annapolis, Israel must demonstrate its commitment by stopping settlement expansion and removing outposts. This is essential for the creation of a viable Palestinian state.

I know that there are some who are skeptical of the latest phase in the peace process, as I am very aware of the worsening humanitarian situation in Gaza. But I also believe we have to get fully behind this opportunity for peace. The financial and political support of the international community, including the Arab world, is needed now to keep the opportunity alive.