Nakba Day - AP
A boy marking Nakba Day in Ramallah with a symbolic “key” to his home. Photo by AP
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RAMALLAH - The de facto capital of the West Bank looked as lively as usual this week. A women's clothing store on Al-Arsal Street that offers Nine West shoes is one of several new stores, cafes and restaurants that have opened recently, and a street sign announced the opening of a 4-D movie theater in the industrial area, next to the new rides at a municipal amusement park. Nearby, the finishing touches are being put on the Stars shopping mall.

On the northern end of the street, not far from where the Israeli military checkpoint Surda was once located, construction of the Palestinian central bank building is nearing completion. Prime Minister Salam Fayyad's bureau has moved into a new building, and the renovations on the Muqata, where President Mahmoud Abbas' offices are located, have been completed.

In Nablus, the Palestinian stock exchange is more successful than those in other parts of the Arab world, and high-tech companies are opening branch offices throughout the West Bank.

But the economic improvements in the West Bank - like the 16.9 percent unemployment rate at the end of 2010, compared with 25.8 percent in 2005 - are old news. The burning question these days, as the Palestinians are widely expected to ask the UN General Assembly to recognize a Palestinian state in September, is whether or not the Palestinian Authority is capable of making the transition to a real state.

While much has been written about Palestinian economic growth in recent years, the ability to govern that the Palestinian Authority has shown in that time has received less coverage. Take the changes in the judicial system. Unlike the situation under Yasser Arafat, Palestinian security officials are no longer authorized to keep someone in custody without backing up their suspicions of the detainee in court and securing approval from a judge. At the same time, the number of judges has been increasing.

Public opinion surveys indicate that Palestinians' sense of security in the big cities has been rising consistently, and visitors can also sense the dramatic improvement in law and order over the last few years. It begins with the traffic police in Manara Square who actually bother to ensure that cars aren't holding up traffic or parking illegally. It is also expressed in the sharp decrease in crime in several cities and the frequent citizen appeals to the Palestinian police. The armed men who used to be a regular presence on nearly every corner have for the most part disappeared; some have been arrested by either the Israeli army or the Palestinian Authority.

The United Nations, World Bank and International Monetary Fund have announced the PA will be ready to become a state by mid-April. But those institutions have examined only the West Bank, where the PA maintains control due in part to the 45,000 members of its various security forces: the civilian police, which includes special units of riot police; national security forces that are semi-military; the presidential guard; intelligence organizations; anti-terror forces; and general intelligence units.

Paradoxically, the decision by Hamas and Fatah to reconcile is damaging to the Palestinian Authority's readiness to become a state. Even on a surface level, the PA doesn't look like it would be capable of governing in the Gaza Strip - and it doesn't seem like that will change soon, since Hamas is not willing to give up its security forces there.

Infrastructure and health care have also been on the agenda in the West Bank. The PA, whose budget this year comes to $3.7 billion (including about $1 billion in foreign aid ), has invested a great deal of money in recent years to renovate schools and establish new ones, in addition to paving roads in all the cities, and even in rural areas and towns that are not within its purview. And Ramallah can now boast a cardiology center, children's hospital and blood bank.

There is even a Palestinian Football Association, whose 12-team premier soccer league is scheduled to play in an international tournament this week, in honor of Nakba Day. Its chairman? Jibril Rajoub, the former head of the Preventive Security Service.