The report by the Rand Corporation laid out an ambitious plan for the Palestinians to achieve economic progress but was based on the assumption that they first achieved a stable peace agreement with Israel.

   

"A Palestinian state can succeed," Ross Anthony, one of the authors, said on Wednesday. "But it will not be easy."

   

The centrepiece of the plan was construction of a new corridor from the northern West Bank to Gaza, which would support a 225km high-speed train, highway, aqueduct, energy network and fibre-optic cable linking all of the future state's major towns and cities.

   

The new rail line could whisk visitors who enter Palestine through an envisaged new international airport in the southern Gaza Strip to anywhere on the West Bank within minutes.

 

Efficient

 

At the same time, it would provide a swift and efficient way of moving exports from the West Bank to the new state's port at Gaza.

 

Palestinian exports would have
to go through Gaza port

However, everything depended on security, the authors said.

   

"The success of an independent Palestinian state is inconceivable in the absence of peace and security for Palestinians and Israelis alike," the report said.

   

"An independent Palestinian state must be secure within its boundaries, provide for the routine safety of its inhabitants, be free from subversion or foreign exploitation and pose no threat to Israel."

   

The estimated price tag of $33 billion represented an annual average of $760 per person that was broadly comparable with other nation-building efforts.

   

But co-author Steven Simon said: "No one knows what this would really cost at the end of the day."

 

Political realities

   

The report ignored many of the political realities now pertaining in the region, notably the existence of an armed Palestinian resistance movement and the strength of the powerful Israeli settler movement opposed to territorial compromise with the Palestinians.

 

The study did not take the armed
Palestinian factions into account

It did point out some other formidable problems a future state would face: rapidly depleting water resources, crumbling infrastructure, high poverty rates exacerbated by the intifada which began in 2000, a growing labour force much of which is unemployed and a fast-growing population.

   

The new state's population is expected to double within 20 years, boosted by an influx of over 600,000 refugees from the Palestinian diaspora.

 

Authors said this population growth could best be accommodated in new areas linking historic city centres to the arc.

 

Development arc

   

Construction of the development arc would create up to 160,000 jobs for five years and create thousands more in new businesses built up along the corridor.

   

The authors said Palestinian prospects of success would be enhanced if the future state achieved territorial contiguity and its borders with Israel remained open.

   

"An independent Palestinian state must
be secure within its boundaries"

Rand study

This flies in the face of the security fence now going up between Israel and the West Bank and Israeli efforts to retain major settlement blocs that critics say would split any future Palestinian state into geographically isolated cantons.

   

Pointing out another major challenge, the report said the stability of a future state would be compromised if it allowed a flood of Palestinian refugees to enter in its first years.

   

"Such a return would likely swamp Palestine's infrastructure and institutional capacities," the report said.

   

It suggested annual immigration quotas to prevent a "massive and chaotic return to Palestine".

 

Yet the authors acknowledged that limiting refugee return could stir up enormous anger and risk destabilising the new Palestinian government.