Palestinian Prime Minister Salam Fayyad will brief Western representatives in Brussels on Wednesday on his bid for nearly $5 billion in investment to launch a Palestinian state.

The Palestinian Authority's three-year development plan, obtained by Reuters, requires $1.467 billion this year, $1.754 billion in 2012 and $1.596 billion for 2013.

"We have distributed the plan to the donors and they have welcomed it," Palestinian Planning Minister Ali al-Jarbawi said.

The plan will be presented formally to donor countries at a pledging conference in June, he said.

Palestinian leaders plan to ask the United Nations General Assembly in September to recognize a Palestinian state in all the lands Israel occupied in 1967. Israel warns unilateral moves cannot replace negotiated peace but the Palestinians say nearly two decades of talks have failed to give them a state.

The United Nations, the World Bank and the International Monetary Fund have praised Fayyad's drive over the past two years to establish the institutions and attributes of a modern state in time for the General Assembly meeting in September.

"The journey has been long and arduous, but the end is now in sight. We are now in home stretch to freedom," Fayyad says in the introduction to the plan. "Now it is time for us to be the masters of our own destiny in a state of our own."

The plan says "the next three years will witness a transformation in the nature of external aid from 'life support' to real investment in the future of Palestine".

It calls for an economy led by the private sector, reducing government's recurrent expenditure while increasing development spending.

It says GDP growth is expected to reach 9% this year, rising to 10% in 2012 and 12% in 2013. Unemployment is projected to decline from 25% in 2009 to 15% in 2013.

The fiscal framework projects 16% annualized growth in revenue over the three years, with total net revenues exceeding $2 billion in 2011 and well above $3 billion in 2013, due to an increase in tax revenues.

But donor states, which have given billions in aid to the Palestinians over the years, will need no reminder that Israeli control of 60% of the West Bank constitutes a major barrier to the full development of its economic potential.

The development plan's inclusion of the Gaza Strip ignores the fact that it is currently under the control of the Islamist Hamas movement, blockaded by Israel, shunned as a terrorist group by the West and pledged never to accept the Jewish state.

"Development of vast areas of West Bank land, isolated and damaged by the occupation, will also require sustained effort and investment for many years to come," the plan says.

Israel says only a negotiated treaty to establish a Palestinian state living in peace with Israelis can resolve the Middle East conflict. But talks broke off last September and the Palestinians say they will not go back to the table as long as Israel continues to build in settlements on the West Bank.