I was last in Ramallah a year and a half ago, and the change since then is striking. The headquarters of the once-feared Palestine Liberation Organization had been on the second floor of a nondescript office building above a furniture store; now it is in a gleaming office tower adjacent to the sprawling compound of the Palestinian Authority’s president.

I’m not sure there is reason to fear the PLO anymore, but the organization certainly has a better address.

All around the center of town are fancy restaurants with American names, as well as newly constructed buildings, fried chicken joints and even a coffee shop with a familiar round green-and-white logo. Stars and Bucks, it’s called. Not even subtle.

There is rubble on every other street, and plenty of empty, trash-strewn lots along thoroughfares that could have looked the same half a century ago. But the signs of economic vitality are unmistakable, and while Ramallah remains, in the words of one observer, “a five-star prison,” it is also clearly striving to take its place among the national capitals of the world.

If there is one person most closely associated with this city’s ambitions, it is the man who greets me with a pleasant handshake and a businessman’s smile, Prime Minister Salam Fayyad. His popularity extends from the Palestinian public to the Western halls of power, even to the Israeli government, where he is referred to approvingly. Yet his position is on the line, caught between the potential demands of a unity government with Hamas and the rising expectations for Palestinian statehood ignited by his government’s bold, some say reckless, move at the United Nations last September.

Fayyad seems undeterred. “We have to believe that this is something that can happen and indeed will happen,” he said, perching on the edge of the sofa in his well-appointed office. “It is definitely overdue, and the more that people really begin to view this as an inevitability, the more likely it is going to happen sooner. And when I say ‘people,’ I do not mean only Palestinians, but also Israelis.”
Related

Fayyad seems intent on — to borrow a phrase most commonly associated with Israel’s settlement building — creating facts on the ground. For him, the appearance of statehood lies not in banners and proclamations, but in the ordinary functioning of government: the imperatives of paying bills, closing budget deficits, reversing decades of mismanagement and corruption that had plagued the P.A. and diminished its standing with its own people.

As befits a man with a doctorate in economics, Fayyad can get lost in the numbers, as if sounding the technocrat confers a certain legitimacy, making him seem like the governor of a medium-sized state or any one of the businessmen-turned-mayors who run large American cities. He clearly has a sense of humor about his wonkish predilections. Before excitedly telling me about a new management program, he said, “If you fall asleep now, I won’t mind too much.”

The P.A.’s financial situation, however, is no laughing matter. Foreign aid is shrinking, and tax revenues are at the mercy of the Israeli government, which collects them monthly but has handed them over to Ramallah only erratically, occasionally withholding the money as a form of punishment. Since those revenues comprise two-thirds of the Palestinian budget, the effects can be devastating.

“It’s something that should not have been,” Fayyad said. “It really should not even be contemplated. Because unlike aid, this is not a sovereign choice. This is Palestinian money, collected under arrangement by the government of Israel…. You hear Israeli politicians refer to this money as if it’s Israeli money. Some actually say we want to punish the Palestinians. Language like this, it’s not language that one would expect to still hear in the 21st century.”

Unfortunately, we hear American politicians talking like that, too.

The matter of the money transfer is not Fayyad’s only frustration with his next-door neighbor. Although by all accounts the P.A. has done a credible job of assuming responsibility for security in the West Bank, the Israeli military still makes repeated incursions into Palestinian territory. “Somebody needs to convince me as to why it should continue to be found justifiable for the Israeli army to be sent to our own areas,” Fayyad said. “And somebody needs to explain to me why is it that the government of Israel deals one way with nonviolent demonstrations on the streets of Tel Aviv and another on the streets of Jerusalem or elsewhere on the West Bank.”

The Israelis have plenty of frustrations of their own with Fayyad and his boss, P.A. President Mahmoud Abbas, beginning with the unilateral bid for statehood, which many viewed as an end-run around the kind of negotiated settlement that can truly bring this stubborn conflict to a close. And while the predictions of a diplomatic tsunami in September were not realized, neither was the U.N.’s endorsement of Abbas’s request for recognition.

This has left Fayyad in a precarious political situation that, made more uncertain by his government’s unity talks with Hamas, has signaled its dislike for the wonkish prime minister whom Western leaders love to embrace. If a forced retirement is in his future, Fayyad is not saying. On the contrary, he speaks with enthusiasm about the strides that his government has made to become more efficient, to reach Western standards of accountability, to include women at all levels and to act, in his words, “in a mature way.”

He mentions that although public opinion polls show that a majority of Israelis and Palestinians still want a two-state solution, there is also a majority that think it won’t happen.

“Part of what I’ve been trying to do, consciously, is bridge the gap between these two positions: one where you prefer to see it happen, the other where you don’t think it’s going to happen,” Fayyad said. “Well, guess what? Unless you believe it will happen, it’s not going to happen. This is one of those evolutionary events that are most unlikely to be realized unless you create a sense of inevitability. Because that’s what’s going to provide the transformative power to really convert this from something we’d like to have to reality.”

His words sound an awful lot like Theodor Herzl’s famous dictum, “If you will it, it is no dream.” Yet Fayyad is not just a dreamer. As the region churns with conflict, and peace talks barely limp along, his persistent drive to build the institutions of Palestinian statehood may be the future’s best, and only, hope.