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RAMALLAH - Palestinian Prime Minister Salam Fayyad said yesterday that the declaration of a Palestinian state would be a mere formality once the institutions of a Palestinian state are created.

Speaking at a press conference in Ramallah organized by the Saban Forum, Fayyad said it is important to create institutions that are functioning, committed to the Palestinian people and free of corruption.

Speaking in Arabic, Fayyad said building national institutions is an important step in preparation for the establishment of a Palestinian state within the 1967 borders with Jerusalem as its capital.

Fayyad said it was the responsibility of the Palestinian Authority to lay the groundwork for statehood, while it is up to the Palestine Liberation Organization to actually declare a state when the conditions are right.

He added that his government is dedicated now more than ever to providing resources to West Bank areas negatively affected by settlements and the separation fence.

"Our people are continuing to demonstrate against everything that is illegal under international law, including the separation fence," he said.

The press conference was held at the end of a discussion Fayyad held with 80 guests as part of the Saban Forum, organized by Israeli-American media tycoon Haim Saban. Some 40 guests arrived in Ramallah from the United States, including three U.S. senators and five congressmen. Forty Israelis were also in attendance, including Bank of Israel Governor Stanley Fischer.

U.S. Senator Joe Lieberman said of the visiting members of Congress that to a certain extent they arrived as investors, and are going to carry back to Washington their our own positive reports about how the money of the U.S. Congress has been spent.

Lieberman told the assembled reporters that the U.S. representatives were impressed by the progress visible in Ramallah.

Howard Berman, a Democratic congressman from California, said the American visitors agree with U.S. President Barack Obama's comments in his Cairo speech, in which he said the U.S.-Israel bond is unbreakable. But he said that feeling in no way precludes the strong commitment to the idea of Palestinian statehood and to the end to the occupation.

In response to a question posed by Haaretz over his vision of Mideast peace, Lieberman said his objective is that there be two states, the Jewish state of Israel and a Palestinian state, and that in both those states, every citizen has equal rights, regardless of ethnic or religious background.