The Quartet members also called on Israel to dismantle outposts erected since March 2001.
 
Condoleezza Rice, the US secretary of state, speaking at a press conference after the Quartet meeting, said there were now measures in place to help improve the situation in the region.

'Specific tasks' 
 
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She said: "It's very difficult to do this in a kind of macro way, or a  general way. It comes down to very specific issues, that issue of that checkpoint or that roadblock that's preventing that kind of economic activity in that town ... it gets that specific."
  
"And I think what we do have now is a much more effective way of both looking at where real improvements can be made and in checking to make sure that the parties are making the improvements that they have undertaken to make."
  
Rice also said that there was now "quite a bit of detail" on what effect the removal of 50 roadblocks that Israel had promised to remove would have.
  
"It's a much more labour-intensive and specific process than I think one could imagine," she said.

Donors' meeting

Donor countries have also gathered in London to discuss ways to revive the Palestinian economy.

Blair said that the Palestinian economy can be
improved [AFP]
The UN chief has met foreign ministers from a number of Arab states in an effort to develop economic institutions in the West Bank and Gaza.
 
Marwan Bishara, Al Jazeera's senior Middle East analyst, said that "money should not be thrown at the Palestinian territories".

He said: "Money cannot be injected into Palestine, without solving the issue of Israeli occupation, and the economic blockade of the Gaza Strip."

"This needs to be resolved, otherwise there is really no point in the attempt to improve the economic situation there."
Before the London talks, aid agencies urged the Quartet to use the meeting to press Israel to end its blockade of Gaza.
  
The agencies urged the grouping "to end its complacency by putting the highest diplomatic pressure on the Israeli government to lift the blockade on Gaza".

Gaza issue
  
Warning of "an impending humanitarian crisis," they added that the Israeli stranglehold on the Gaza Strip "has made life for ordinary people intolerable" and made it near impossible for aid agencies to work there.

A Paris donor meeting last year netted $7.7bn in aid pledges to the Palestinians over three years.

The money was aimed for the Palestinian budget, as well as reform and development programmes.

The optimism that surrounded the pledges has long since faded, but diplomats hope an initiative to attract private sector investors may bear fruit.

Tony Blair, the former British prime minister, now working as a Middle East envoy for the Quartet, is said to be working on the plan to spur economic development inside the Palestinian territories.

He and Salam Fayyad, the Palestinian prime minister, met investors on Thursday in effort to boost ecnomic growth.

Blair said: "People talk about the problems they see on their TV screens, and we are not minimising that."

"Yes, there are enormous problems. But the economy on the West Bank is actually growing and people are making money."

Al Jazeera's Mark Seddon, reporting from London, said that the meeting is primarily aimed at getting the money pledged in 2006, into the Palestinian territories.

He said: "Much of the $7.7bn hasn't reached the Palestinians."

"What is also problematic is the Quartet's current policy of not talking to Hamas. But diplomats also want assurances from the group that they will try and contribute to the growth of their economies."