Palestinian Prime Minister Salam Fayyad is quietly changing the rules of the Arab-Israeli conflict with a simple credo: Palestinians have to build their state now and cannot wait for an elusive peace deal with Israel.

He is moving ahead with an ambitious plan to get the Palestinians ready for statehood by August 2011 by trying to build it from the ground up: paving roads, reforming the judiciary, planning new cities.

The U.S.-trained economist has been showered with praise, money and support by the U.S. and Europe. Official Israel has said little, though some in Israel express concern that Fayyad is spearheading a Palestinian strategy to bypass negotiations, declare a de facto state and seek international recognition for it.

Fayyad believes success creates its own momentum, that presenting a compelling case for a Palestinian state will make it inevitable. But he stops short of saying the Palestinians would declare independence on their own.

"The thinking was, by around mid-2011, if the political process will not have produced an end to the occupation ... the reality of a Palestinian state would force itself on the political process, on the world," he said in a recent interview conducted in his motorcade driving through the West Bank.

Fayyad has focused in recent months on trying to rekindle enthusiasm among Palestinians disillusioned by years of failed peacemaking.

He is reaching out to them, bypassing the power structures of the Fatah movement of his boss, President Mahmoud Abbas. Fayyad, an independent, delivers a weekly radio address, meets regularly with Palestinian reporters and has hired a consultant to manage his Facebook and Twitter accounts.

And unlike Fatah politicians, who mostly hold court in their offices, he travels to different parts of the West Bank every few days.

Fayyad's high-profile appearances have shifted attention away from Abbas, who as chief peace negotiator has little to show for five years in office and spends much of his time on diplomatic missions abroad. The 75-year-old Abbas says he won't seek reelection, and there has been speculation Fayyad might one day seek the presidency.

Fayyad says he is campaigning for a vision, not political office.

Yet the gap between reality and aspirations remains huge.

Fayyad, who was appointed to his post in 2007 by Abbas, only has limited authority over 40 percent of the West Bank, with the rest under full Israeli control. The Gaza Strip — which together with the West Bank is supposed to make up a Palestinian state — is in the hands of Hamas militants who drove out Abbas' forces in 2007.

And Israeli Prime Minister Benjamin Netanyahu says he will never let go of east Jerusalem, the Palestinians' hoped-for capital.

Fayyad's life reflects these contradictions.

He lives in Israeli-annexed east Jerusalem. His wife, Bashayer, has permanent residency there as a Jerusalem native. As a West Banker, Fayyad lives in Jerusalem on a visitor's permit, renewed by Israel every few months.

During his work day in Ramallah, Fayyad often receives foreign dignitaries. On his drive home, he crosses through an Israeli checkpoint.

"If I, for a minute, were to think that this is something I have to deal with all my life ... then one would think, forget about it, this is just really too bizarre," says Fayyad, 58. "But it's a transition. To me, all this is a transition to freedom, to statehood."

Fayyad's strategy stands in contrast to the all-or-nothing approach of more traditional Palestinian leaders — and even invited comparisons to Israel's founding father, David Ben Gurion.

His approach is a balance of cooperating with Israel and confronting it.

Israel responded to Fayyad's success in restoring order in once chaotic West Bank towns by scaling back troops and easing movement restrictions. This enabled the hard-hit Palestinian economy to bounce back a little. The boomlet, along with Fayyad's transparent spending and his state-building plan, persuaded donor countries to keep sending massive amounts of aid.

However, Fayyad also supports Palestinian grassroots protests against Israel and has pushed to build in the 60 percent of the West Bank off-limits to Palestinian development.

"Fayyad's biggest challenge is that he has to walk a tightrope between the coordination with Israel that his statebuilding plan requires and the defiance of Israel that Palestinians demand and toward which they are gravitating," said Robert Blecher, an analyst at the International Crisis Group think tank.