Palestinian Prime Minister Salam Fayyad forthrightly brought his case for building a Palestinian state to Israeli political and military leaders, and they applauded. The new Palestinian attitude towards how to end the occupation that began in 1967 was on full display during Fayyad's speech at the Herzliya conference in Israel earlier this month, and it has had a considerable impact on its Israeli audience.

With reports that "proximity talks" between Israelis and Palestinians will begin soon, attention must be paid to Fayyad's remarks and their reception.

Fayyad did not hold back in presenting the Palestinian perspective to Israel's leaders. He firmly called for a settlement freeze, insisted that a Palestinian state must be fully sovereign and viable with East Jerusalem as its capital, and reasserted that the goal of the national movement is the creation of such a state living alongside Israel in peace and security. Although some Palestinians and Arabs criticized Fayyad for taking part in an Israeli conference on security, he received very strong support from many Palestinians based on the content of his remarks.

Standing on a record of performance and credibility, and cognizant of Israeli policy changes such as reaffirmed commitment to a two-state solution, reduction in checkpoints and security cooperation, Fayyad proposed in his speech the literal creation of a state in spite of the occupation, with the understanding that if such a state becomes an undeniable reality, formal recognition of its existence and an end to the occupation will be irresistible.

Fayyad thought he was going to a panel discussion and arrived at the conference without a prepared text. His extemporaneous comments reflected the systematic logic of serious policies meant to end the conflict and not talk about ending it.

Since last August when Fayyad's cabinet adopted a formal plan for building the institutions of a state, while under occupation, to end the occupation, he has been at the epicenter of a transformation within the Palestinian national movement. With the support of President Mahmoud Abbas and his cabinet colleagues, he has been re-orienting Palestinian energies towards a constructive governmental and social program aimed at laying the groundwork for establishing a state of Palestine.

Many Israelis seem uncertain how to react to this unanticipated development. The Israeli extreme right wing and settler movement have made their angry objections crystal clear, and denounced Israeli President Shimon Peres for comparing Fayyad to Israel's first Prime Minister, David Ben-Gurion.

The audience that Fayyad was really aiming at was the Israeli national security establishment that understands that a peace agreement with the Palestinians is a strategic imperative for Israel, but had not seen a credible way of achieving it. His approach provides a way for both peoples to exchange a vengeful, tribal clash for a new paradigm that respects each other's national rights and narratives.

Fayyad's message was loud and clear: We can and will build our state in preparation for ending the occupation, without asking for permission. Addressing criticisms that his program is unilateral, he insisted that it must be so, for if Palestinians do not build their own state, "who is going to do it for us?"

The Prime Minister cited numerous examples of what this means in practice, including more than 1,000 community development projects that have already been completed, the creation of the nucleus of a Palestinian central bank and the performance of the new Palestinian security services.

He, President Abbas and his cabinet colleagues have had the vision and courage to push the Palestinian national movement into a new phase that embraces the responsibilities of self-government as it continues to insist on the right of self-determination. In Herzliya, Israel was listening.

However, the Palestinians will not be able to fully realize this ambitious and potentially transformative program on their own. It will require a sustained global effort to provide the Palestinian Authority with the financial and technical support and the political protection that will be required for it to succeed. The Obama administration, the Quartet, Arab governments and the Israeli government have a state-building plan in Palestine. This is the time for them to act.

By turning their attention to establishing the administrative and infrastructural framework of such a state, responsible Palestinians are doing their part to build the infrastructure of peace. They are paving their own way for the people of the Middle East to live in peace with security and dignity for all.