Blair says Palestinians need institutions for a state

By Evelyn Leopold

UNITED NATIONS (Reuters) - Former Prime Minister Tony Blair said a Middle East 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.

"There 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 U.S. 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.