Secretary of State Hillary Rodham Clinton speaks at the Fifth Annual Gala of the American Task Force on Palestine in Washington, 20 Oct 2010

U.S. Secretary of State Hillary Clinton says Arab countries should provide more financial support to the Palestinian Authority.

Speaking Wednesday to pro-Palestinian group the American Task Force on Palestine in Washington, Clinton said it takes more than plans and commitments "to support making the state of Palestine a reality." The U.S. and the European Union are the Palestinian Authority's main donors.

2 state solution

The chief U.S. diplomat called a two-state solution "essential" to the future of the Palestinian people. Repeating messages she has given to Israel, Clinton urged the Palestinians to focus on what could be gained through negotiation, not what might be sacrificed.

Clinton praised Palestinian Prime Minister Salam Fayyad's two-year program unveiled last year to prepare Palestinians for statehood through gradual political and economic development. She said under Mr. Fayyad's direction, Palestinian streets are safer, the legal system has improved and taxes are being collected more efficiently.

Last month, the World Bank released a report projecting an economic growth rate of eight percent this year in the West Bank and Gaza. However, it notes those advances are largely due to foreign assistance.

US seeks agreement

In her speech, Clinton also promised that, whatever the difficulties, the Obama Administration will not give up seeking a peace agreement between Israel and the Palestinians.

Negotiations were relaunched in Washington on September 2 following a 20-month hiatus, but have stalled over Israel's refusal to extend a 10-month moratorium on Jewish settlement building in the West Bank.

Palestinian President Mahmoud Abbas says the international community is unanimous in its demand that Israel extend the partial settlement freeze.

Palestinians fear settlements will deny them a viable and contiguous state.

Israeli Prime Minister Benjamin Netanyahu says the future of the settlements should be decided at the negotiating table and not serve as a condition for talks.