In the past two years, Palestinians who live in the West Bank have seen economic growth that would be the envy of other nations. The Israeli checkpoints that aim to stop terrorists but make travel difficult have been reduced by half.

And there is an explosion of construction projects ranging from industrial parks to the first planned city in modern history in a territory that fails to treat much of its sewage.

Both Israelis and Palestinians say the progress is the result of cooperative agreements between functionaries on both sides who have been working quietly but effectively to improve life in the West Bank while negotiations for a permanent independent Palestinian state are on hold.

And some worry that the progress will be halted by the Palestinian Authority campaign at the United Nations this week for statehood without further negotiations. President Obama and Israel say a state can be created only through talks.

A confrontation now "would wreck everything that's been done," says Ziad Asali, a Palestinian who is president and founder of the American Task Force for Palestine, a think tank that advocates for a two-state solution and a demilitarized Palestinian state.

Palestinian President Mahmoud Abbas met in New York on Tuesday with French President Nicolas Sarkozy as he sought support ahead of his General Assembly speech on Friday, when he has vowed to request U.N. membership.

"Abbas says to everyone: It's enough, 20 years of negotiations are more than enough, the world should intervene and end the Israeli occupation as long as the USA can't," says Mohammed Ishtayeh, an Abbas aide.

Asali and others give much of the credit for the progress in the West Bank to Palestinian Prime Minister Salam Fayyad, who has overseen growth of 7% in 2009 and 7.6% in 2010. The construction boom includes an $850million Qatari-funded housing project outside Ramallah.

Fayyad also established law and order, working with Israel, the USA and Palestinian security forces to keep the peace and thus reducing Israeli checkpoints and the number of Israeli military raids, Asali says.

His efforts were designed to show that the Palestinians could have a functioning state, says Asali, but negotiations for that state have gone nowhere. His building of a functioning Palestinian government once famous for its corruption is "one of the main Palestinian success stories of the past two years," Asali says.

Fayyad could become a casualty of the statehood bid if it results in acrimony between Palestinians and the USA and Europe, says Shibley Telhami, an Israeli-born Arab at the Brookings Institution's Saban Center for Middle East Policy.

"Abbas supports him because he's a good ambassador to the rest of the world, particularly the United States and Europe," Telhami says. If those relationships sour, his reasons for keeping Fayyad will fade, Telhami says.

Fayyad's office did not respond to a request for an interview.

Israeli Prime Minister Benjamin Netanyahu warned the international community against establishing a Palestinian state when many issues that would ensure lasting peace remain unresolved, such as borders and acceptance of Israel as a legitimate Jewish state.

The Palestinian statehood bid is a unilateral move that could nullify "all signed agreements" between the two sides, Israeli Deputy Foreign Minister Danny Ayalon says. "Future assistance and cooperation could be severely and irreparably compromised," Ayalon says.

Telhami says that the U.N. vote may result in some difficulties for Palestinians for a while, but that negotiations will follow in any case.

"As soon as the dust settles, both sides will come back to the realization that there is no alternative as long as the prospect of a two-state solution is viable," he says.