British Prime Minister Gordon Brown on Monday urged U.S. President-elect Barack Obama to make the Middle East peace process an urgent priority.
The outgoing Bush administration had wanted an agreement on Palestinian statehood by the end of this year, but a lack of progress has left hopes pinned on a fresh approach from Obama when he takes office in January.
"The 22 Arab states calling on President-elect Obama to prioritize achieving a comprehensive plan is a very important development indeed," Brown told reporters after talks with Palestinian Prime Minister Salam Fayyad.
"We are very much of the same view," he said. "We are working hard to ensure that progress is possible during 2009."
The 22-member Arab League wrote to Obama about the issue last week, and the quartet of Middle East peace negotiators - the United States, United Nations, European Union and Russia - is due to meet at the United Nations on Monday.
Brown, who is scheduled to hold talks with Prime Minister Ehud Olmert on Tuesday, repeated his call for the withdrawal of settlements from the West Bank and a freeze on settlement expansion.
"Everybody now sees the contours of what a two-state solution would look like ... One of the blockages to that is clearly the settlement issue," Brown said.
"I hope in the coming days we can move further and faster towards the peace settlement that everyone wants to see happen."
Olmert, who will remain as interim prime minister until a new election is held on February 10, has tried to clamp down on illegal settlement outposts, but around 300,000 Israeli residents remain among 3 million Palestinians in the West Bank.
Fayyad, whose Western-backed government is based in the West Bank, said his administration was making every effort to heal its rift with Hamas, the Islamist Palestinian movement which controls the Gaza Strip and is expanding in the West Bank.
"Everything that can be done should be done in order to reunite the country," he said. "It is an absolute requirement for there to be reunification of our country for there to be reconciliation."
Attempts by Palestinian President Mahmoud Abbas to reunite the factions in the West Bank and Gaza and form a unity government have failed despite more than two years of talks.
Former British Prime Minister Tony Blair, now an international Middle East envoy, said that he also sensed possible momentum for a peace deal.
"With a new administration in the U.S., and I think there will be a new Israeli government, this issue has got to be gripped," Blair told the investors conference.
Fayyad welcomed the prospect of new investment in the Palestinian economy, but told Blair and Brown that a political settlement was the key to peace.
"It is a political conflict and it requires a political solution. Focusing on so-called economic peace simply won't cut it," he said. "True prosperity will only come with true Palestinian freedom and statehood."
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