Palestinians need institutions for a state: Blair

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UNITED NATIONS, Sep 24 (Reuters) Former British Prime Minister Tony Blair said a West Asia political pact will work only if Palestinians first build proper institutions and living conditions are improved in the West Bank and Gaza.

In his first comments at a meeting of Middle East mediators, Blair on Sunday spelled out his vision for steps toward an agreement since becoming the envoy for the quartet -- the United States, Russia, the European Union and the United Nations.

''here is momentum back in this process,'' he told a news conference. ''That doesn't mean to say that we're foolishly optimistic after all the difficulties of the past. But things are moving again.'' He said the meeting in November, called by US President George W Bush, would invigorate political negotiations between Palestinian President Mahmoud Abbas and Israeli Prime Minister Ehud Olmert but not solve all problems at once.

Secondly, Blair said there would be publication of the Palestinian national agenda for creating institutions for a Palestinian state.

''A state without proper functioning institutions is not a state,'' Blair said. ''A state's not just about territory; it's about capacity, capability, about governance.'' Blair said for the third aspect, there must be ''things happening on the ground that give hope to people, in Israel and on the Palestinian side -- that their lives are going to improve, that things are going to change, that people have the prospect of an improvement in their living standards.'' Elaborating on the three phases, Blair, in an interview with Al Jazeera television, said, ''I think part of the mistake in the past is to say, 'OK, we deal with the politics here, we deal with the capabilities there.' It's not like that.

''These three things go together the whole time. It's not one first and then the other two,'' he said. ''The November meeting, will in my view, be important in establishing whether there is the basis for us to move forward.

''This process a few months back was comatose,'' Blair said. ''I think it is now awake and is still requiring intensive care but there is a real chance.'' Israelis, Blair said, worried about ''being rushed into final status negotiations before they are ready to do it and when there are so many security and other problems.'' Palestinians, on the other hand, ''need to have the hope of genuine political progress in order to make the changes.'' ''So you have to work within the two parameters from the political positions of either side but I think that is possible to do,'' Blair said.

WHAT ABOUT HAMAS? Asked about the rejection of Hamas, which controls the Gaza Strip, despite winning elections, Blair said the problem was conducting negotiations with a party that did not accept a two-state solution, such as the existence of Israel.

''We accept totally the choice of the people,'' he said. ''We are prepared to help get that Palestinian state and we are prepared to help anybody get that Palestinian state -- provided they accept the existence of the other state.

''But obviously we can't give money to a government, if we are not sure how that government is going to use that money,'' he told Al-Jazeera.

Asked about Hamas's offers of a truce, Blair said, ''If someone said to me, 'We're basically at war with you but we will give you a long truce,' I would think quite carefully before accepting that.'' He said there were few signs that moderates in Hamas had the upper hand since rockets were still fired into Israel.

''They want me to go to the Israelis and say, 'You should be dealing with these guys whilst they are allowing someone to fire rockets at school children on the Israeli side,''' he said.

REUTERS SZ AS1210

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