Condoleezza Rice, the US secretary of state, had urged donor countries at the opening of the conference to allocate uncommitted funds from their existing pledges to support the PA.
She said: "Every link in what we call the chain of security must be intact and unbreakable. To... invest in a future state the Palestinians must have confidence that their police, courts, and penal system are dedicated to upholding the rule of law and respecting human rights."
The PA presented a list of projects that it needed help on to the conference.
Tony Blair, the Quartet's chief envoy, described the list as "proper and comprehensive".
Blair said that a functioning criminal justice system was "fundamental for a two-state solution".
"This is not just about forces with guns, it's about a proper functioning criminal justice system, it's about courts, the prosecution service, the prison service, it's about the whole infrastructure that goes to make up the criminal justice system and a state.
"There will never be a two-state solution just by people sitting in a room negotiating... a state will only be created when people take the action to create the reality that allows a state to be credible, credible for the Palestinians... credible for the Israelis," he said.
Salam Fayyad, the Palestinian prime minister, told the conference that while better security conditions were vital for the creation of a Palestinian state, such improvements must be accompanied by other measures such as an immediate freeze on new Israeli settlements and the dismantling of Israeli checkpoints.
He said: "There needs to be progress not just on the security front but also on the political side."
He also warned that the state of the PA's public finances were "critical".
Tzipi Livni, Israel's foreign minister, said that the vast majority of the Israeli population saw the need for a two-state solution but that they needed to see evidence that the eventual Palestinian nation would be a "democratic, responsible state".
"When we hand over the keys ... we need to know that our neighbour is a partner for peace. I need to know what is going on on the other side of the border," she said.
Others attending the conference included Amr Mussa, the Arab League secretary-general, Javier Solana, the EU foreign policy chief, and 23 foreign ministers.
The conference is focused on helping the PA in the West Bank and does not cover the Gaza Strip, which has been controlled by Hamas since last year.
Earlier, Al-Quds, the military wing of the Islamic Jihad movement, fired three rockets into southern Israel after Israeli troops killed two Palestinians in the West Bank city of Nablus.
Following the violence, the Quartet said in a statement: "The Quartet urged that the calm be respected in full and expressed the hope that it would endure, and lead to improved security for Palestinians and Israelis alike, and a return to normal civilian life in Gaza."