For decades, the political process simply meant negotiations about the often-repeated final status issues. Hopes were raised and then dashed in extended clusters of negotiations, numerous international conferences, TV appearances and commentaries by politicians and pundits that yielded no meaningful progress toward resolution of the conflict.

Little attention was paid to what was actually happening on the ground, its impact and implications for the peace process, the need to rebuild the Palestinian society after decades of occupation especially after the devastating impact of the second Intifada, and how to prepare it for statehood.

The institution-building program of the Palestinian Authority Government which addresses these issues is surrounded by a great deal of confusion and misunderstanding. This may be a function of the very nature of the program: a political project that has its foundation in the technical aspects of building a nation.

At a first glance, the program appears to be only technical, steeped as it is – and as it should be – in security sector development, governance reform and economic policies. Indeed, what has made it so noteworthy, and so different from the traditional hollow pronouncement of reform by most Arab governments, is the fact that the program has already delivered improved security, better governance and economic growth. It is remarkable that the most successful and wide-ranging Arab reform program should happen in the most unlikely locale. Palestine, with its reality of occupation and a political culture, reflecting that reality, which has traditionally focused on liberation at the expense of governance, has accrued these elements of national strength.

Much has been said and written about Prime Minister Fayyad’s government program, and I will not repeat what you undoubtedly know. I would only like to emphasize that the judicious efforts towards reform must continue if the program’s potential is to be realized. This is a political program par excellence in terms of its ultimate objectives, impact, and what is needed to sustain it. It is precisely because of these political implications that the world must provide the Palestinians with the necessary financial and technical support needed to properly implement reforms.

From its very inception, the entire program of building Palestinian institutions and a sovereign state has been explicit and unapologetic about its objective: the Palestinians are building their institutions under the occupation with the ultimate aim of ending the occupation. If the project becomes – or is seen to become – a tool of maintaining the status quo and beautifying the occupation, it will be abandoned – not only by the Palestinian public, but by the very leaders who initiated this program.

This is an inspirational and aspirational program the credibility of which is based on building concrete as well as systemic facts on the grounds while it generates support. It has already had an undeniable political impact both domestically among Palestinians and upon the foreign policy realm.

Domestically, it is helping to shift Palestinian political cultural from the understandable yet ultimately self-defeating sense of victimhood and entitlement into one of self-empowerment, where adversity is seen as challenges to overcome. Since the program was initiated in August 2009, the two thousand projects already implemented offer clear evidence that a good portion of Palestinians’ fate lies in their own hands. This ongoing paradigmatic shift is changing what Palestinians expect from themselves and their governing elites and is introducing new political criteria for judging the success or failure of political actors.

Critics have claimed that this program has brought nothing new and is nothing more than a political theater. This assertion cannot withstand the test of reality, as can be witnessed by anyone who has regularly visited the West Bank over the last decade. Nor is it consistent with the assessment of international organizations like the World Bank which have judged the reform trajectory sufficient to form the foundations of a vibrant Palestinian state.

Arab citizens throughout the region are demanding governmental reform and Palestinians are no exception. Finger pointing, complaints and rhetoric in lieu of action have become unacceptable responses by the leaders. The public need for good governance which provides both accountability and competence must be met. Appointing cabinet members qualified to meet these needs, as well as holding Presidential, Legislative and Municipal elections are expected by the public.

In foreign policy terms, the enhanced security developments have enabled the resumption, though not the continuation, of peace negotiations. The state and institution-building program, which has initially received some support in Israel because it was perceived as consistent with what was called “economic peace” has increasingly been viewed as a threat. However, a significant segment of the Israeli military and security establishment, witnessing a new, deep-seated doctrine and professionalism of the Palestinian security forces, has begun to advocate for the program within the Israeli establishment.

The institution-and state-building needs political decisions to protect it. In terms of the Palestinians, the greatest obstacles to implementation in areas under PA control have been the resistance from some within the old Fatah establishment and the security challenges of Hamas. Fatah has to understand that the success of this program, while it might undermine its networks of patronage, is a success for the national-secular Palestinian project and will benefit all moderates.

Israel for its part needs to understand the stability and security that such a project brings about. In order to secure its stated national project of achieving a democratic state as a homeland for Jewish people, Israel must break out of the habit of denying the Palestinians access to land and tightening its squeeze on the ground and the people. Institution-building should be insulated from the diplomatic squabbles of the negotiations by willful political decisions and oversight by the Quartet and its constituent members.

Most importantly, the program must produce political dividends in order to be sustainable. The Palestinian public must feel that they are moving towards statehood and an end to the occupation. Otherwise, the institution-building process becomes vulnerable to accusations of beautifying the occupation. These charges can only be answered by political deliverables foremost among these is a credible peace process.

However, even in prolonged periods of overt diplomatic impasse, progress can be shown through steady extension of Palestinian authority over expanded areas in the West Bank, as well as curtailing and then stopping Israeli forces’ incursions in Palestinian cities and towns. In the meantime, statistics show that the numbers of Palestinians who go back to live in Palestine is slightly more than those who leave it- a significant reversal of a trend that lasted for many years.

The international community needs to treat this program as much more than a development project handled by development agencies. It is an essential component of peacemaking that requires both financial and political support at the highest levels of foreign policy-making. Defining a two-year time horizon, demonstrable achievements on security, governance and the economy, as well as an energetic Palestinian diplomacy have created a global sense that Palestinian statehood is inevitable.

Recent events in Tunisia, Egypt and elsewhere have demonstrated that the Arab public is no longer willing to overlook corruption, mismanagement and bad governance. The international community must learn that stability cannot be maintained at the expense of responsible governance based on rule of law, functioning institutions and viable economies. The Palestinians seem to have anticipated this through a pioneering program that is bringing Palestine closer to independence even as it starts providing the public with improved governance.

The program is still taking root, but it needs to be strengthened because it holds great promise to the Palestinians and to the region. It would be tragic if we were to look at this period in the future as yet another missed opportunity.