More than 10 months have passed since President Barack Obama entered the White House and seven months since Prime Minister Binyamin Netanyahu took over the reins in Jerusalem and there is still no peace process worth mentioning.

Netanyahu campaigned on the slogan of "economic peace" and boasted that he would help the Palestinians build their state from the bottom up by strengthening their economy and thereby "giving them something to lose," so that they will not revert back to violence.

In August, Palestinian Prime Minister Salam Fayyad presented his own plan for Palestinian state-building, under the title: "Ending the Occupation, Establishing the State." This 38-page document is full of detailed plans for developing the institutions of the Palestinian state, though it has almost no reference at all to how the Fayyad government plans to end the occupation. The plan also speaks about a future Palestinian capital in east Jerusalem but makes no reference at all to building any of the governmental infrastructure necessary to run a capital city in Jerusalem.

From an Israeli point of view, most of the Fayyad plan should be warmly welcomed. For years, Israel has complained that the Palestinians don't take responsibility for themselves. Israel has said over and over again that they should learn from the Israeli pre-state days of Ben-Gurion. By the time Israel was declared, the entire infrastructure for statehood was in place.

This is precisely what Fayyad is doing - with great success. The Palestinian Authority under Fayyad's practical and determined approach is launching new projects every week. A lot of attention is being placed on the legal structure - modernizing and harmonizing laws, building a functioning legal and court system, and jump-starting the economy.

Corruption has been removed from the way the Palestinian Authority conducts its business. Great attention is being paid to effective tax collection. Fayyad's plans and his performance are gaining wide public support. The results speak for themselves.

The entire international community is warmly embracing the Palestinian prime minister's work, but only Israel seems to not fully appreciate what is being planned and achieved.

Netanyahu understands that there must be a political peace process, but he is not convinced that there is a possibility of really moving forward on permanent-status issues. He is convinced, at least according to what he says, that the economic peace plans can be advanced. If this is true, there are things that Netanyahu can do and should do that will have a real impact on the ground and also signal that political dimensions of peace making can be part of the progress on the ground, even without negotiations.

Netanyahu and Barak have removed many key checkpoints all around the West Bank, but hundreds of roadblocks still exist; these should come down now as well. Open the roads and allow free movement - it is the key for any economic development.

The Palestinian Authority security forces are engaged in counter-terror activities and not only restoring law and order or traffic control. The Fayyad government relates to issues of security as a Palestinian interest and has succeeded in changing the security discourse from "providing security toIsrael" which was seen as collaboration with the occupation, to "developing mutual security" which means that in order for Israel to have security, Palestine must have security too.

IN PRACTICE, this means that the IDF should cease its incursions into areas controlled by the Palestinian Authority. The "Cinderella law" which requires Palestinian security forces to be off the streets after midnight and allows the IDF to enter whenever and wherever its wants, should now be eliminated, unless the IDF has specific and real-time intelligence information that terror activities are taking place.

Since the intelligence cooperation between the sides has been renewed, the IDF must understand that every time they enter into areas where the Palestinian forces are in charge, the Palestinian forces lose credibility in the eyes of their own people.

It is also time to reclassify Area B - the village areas that are under Palestinian civil control but are really under Israeli military control. All of these areas should be made Area A - transferred to full Palestinian control.

Sixty percent of the West Bank is Area C - under full Israeli control. No serious development project or infrastructure project can take place without using lands in Area C. Even projects that are physically located in Area B must be approved by the Israeli military and the Civil Administration in the West Bank, because the infrastructures would go through Area C.

Israel should approve Palestinian requests to build new cities in the West Bank. This can only be done in Area C - there are no land reserves anywhere else. Imagine two cities like Modi'in being built there; it would really propel the economy, offer real opportunities for investment and create thousands of jobs.

If Israel were wise, it would also encourage the Palestinian Authority and the international community to offer housing grants and loans to enable Palestinian refugees in Lebanon the opportunity of moving to the new cities.

Palestinian refugees have always said that the "right of return" is an individual right and not a collective right (meaning that the Palestinian leadership cannot negotiate it away). The Palestinian refugees in Lebanon should be offered the opportunity to transform their own "right of return to their homes" to the "right of return to their homeland."

New, planned communities with proper infrastructure, schools, parks and commercial centers would offer all Palestinians the chance for a higher quality life, especially for those who are suffering the most - the refugees in the camps of Lebanon.

Another massive infrastructure project that should be started immediately that would have a huge impact, not only on the economy, but on the political process, is the physical link between the West Bank and Gaza. The choices for this are between a land route, a sunken road, a bridge, a tunnel or a combination of those.

Israeli security experts have always preferred the tunnel, for obvious reasons. The tunnel would also require the least amount of Israeli bureaucratic input and intervention. The route is about 40 kilometers and the cost would be at least $1 billion.

It is clear that the tunnel or the link would not become operational until there is a change of the political regime in Gaza, but there is no reason to wait until that time to begin this massive infrastructure project. Not only will it bring in huge amounts of capital investment and create many jobs, it also will bring the "light at the end of the tunnel" much closer to the Palestinians in Gaza.

Even if the official negotiations don't begin and we only have "economic peace" plans to advance, these plans would have significant positive political dimensions to them. There is no reason why Netanyahu should not adopt these and others steps that will have a serious impact and demonstrate that Israel is interested in seeing a viable and successful Palestinian state as a good neighbor.

The writer is the co-CEO of IPCRI, the Israel/Palestine Center for Research and Information (www.ipcri.org) and a leader of the Green Movement political party.