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ERBIL, Northern Iraq - In his huge office in Erbil, the capital of the Kurdistan district, the district governor Nawzad Maulud explains the difficulties involved in building a Kurdish "state": There is not enough electricity, there is no sewage system and no organized water system, the citizens do not pay taxes, and there is no friendly country they can rely on.

In order to establish these services, the Erbil sub-district, one of three Kurdish sub-districts that make up the Kurdish district in Iraq, requires about $1 billion. The solution: private investors, both Kurdish and foreign, will set up the electricity network while the government will take care of the sewage system, and the blossoming economy will develop the friendly country.

Outside the governor's office, one can see construction cranes, steam rollers and lots of workers that are building the new Erbil and its environs, its luxurious homes and commercial centers where foreign investors have already deposited their cash.

Kurdistan is a gigantic success story mainly because it is a country without a real budget of its own. It receives 17 percent of the entire income of the Iraqi government, about $7 billion. Some 75 percent of this sum is devoted to paying wages, and the remainder is earmarked for rehabilitation - buying text books for universities, sending more student delegations abroad, and paying for the sewage network. In this way, Kurdistan can serve as an example to the Palestinian Authority (PA). Both are dependent for their income on other governments and foreign sources. Both are ethnic entities holding onto an elusive national dream. Neither can implement it yet - the Kurds mainly because of the opposition of Turkey, and the Palestinians mainly because they require Israeli permission. The Palestinians want 100 percent of their territory, while the Kurds are demanding that another three districts be added to their region. Neither, apparently, will get everything they want.

Both the Kurds and the Palestinians have similar political experiences. The two main Kurdish factions - one led by Jalal Talabani and the other by Massoud Barazani - waged a bloody war until a decade ago, which led to large numbers of dead and thousands of refugees and destroyed villages. Armistice agreements came and went, and every side accused the other of "selling out of the Kurdish problem." There is neither great love nor much trust between the camps even today, but their mutual interest was paramount - the war in Iraq brought about a coalition of interests between the Kurdish factions. Thus a unique political structure was established: the Kurdish district is jointly administered, and the two camps have an equal number of portfolios and resources.

It is too easy and sometimes an oversimplification to create an analogy between the two conflicts, between the two national or ethnic entities. But the Kurdish example is enticing because of its success. It is possible to try to create from it an educational tool to be studied by the Palestinians and the Israelis, especially those who believe the conflict will last forever and that the only important thing is ideology. In Kurdistan, history is being made every day, and as the editor of the Kurdish newspaper Habath said in quoting the Syrian playwright Sadallah Wannous, "we are doomed to hope."

But it is not merely in the imagination or in the success stories that there is a lesson for the Palestinians and the Israelis, but also in the substantive difference between them.

The Kurds, as their minister for higher education explains, are prepared to delay the declaration of the establishment of a state of their own until such time as they can enjoy economic success and show the world that they do not constitute a danger. The Palestinians - even if they wish to adopt the Kurdish formula and improve their economy prior to a state - cannot. To implement this, the PA requires generosity on the part of Israel that will allow its economy to flourish, will remove roadblocks, will free funds, will allow them to build an airport, and in particular, will provide a genuine diplomatic horizon that will ensure that an investment in Palestine is an investment in a state and not in a ghetto or an occupied territory.