Caretaker prime minister Salam Fayyad said Wednesday that UN endorsement of his administration's readiness to govern amounted to "a birth certificate" for statehood.

Fayyad made the claim after the United Nations special coordinator for the Middle East peace process said in a report that the Palestinian Authority was "sufficient for a functioning government of a state."

He was speaking after a meeting of international donors, chaired in Brussels by Norwegian Foreign Minister Jonas Gahr Store, along with an Israeli government official, that backed the assessment by the UN, World Bank and International Monetary Fund.

Fayyad said the talks in Brussels amounted to "a landmark event" after participants "effectively recognized the reality of a state of Palestine."

He said it was "what amounts to effectively a birth certificate for the reality of Palestinian statehood."

Peace talks between Israel and the Palestinians have been on hold since late 2010 over Jewish settlement in the West Bank and East Jerusalem, and the United States appears at odds with Europe over the validity of moves to resume dialogue.

Speaking for the Middle East Quartet, envoy and former British prime minister Tony Blair said "credible political negotiations" were needed on a "very urgent" basis to "revive the political process."

The European Union also granted duty-free access to farming and fishing goods from the West Bank and the Gaza Strip at the talks, and participants also including Russia and the United States backed observer status for the PA at the World Trade Organization.

In the latest signs of growing European support for a Palestinian state, Brussels granted "immediate duty free access to the EU market" of half a billion consumers for the next 10 years.

The "only exception" to the duty-free goods access is a "specific duty for imports of fruit and vegetables" under what is known as an "entry price system," which prevents Palestinian exporters from radically undercutting domestic EU growers and rival exporters.

The Palestinian Authority is one of the EU's smallest trading partners worldwide, with imports worth just $8.8 million in 2009.

Irit Ben-Abba, an Israeli economic affairs ministry official, said progress on governance was mainly down to Israeli customs and treasury action, and said Palestinian exporters already benefitted from free-trade deals negotiated by Israel.