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A committee of international donors said Israel must stop expanding settlements so that the Palestinian areas can grow economically.

The Ad Hoc Liaison Committee, in a meeting Monday chaired by United Nations Secretary-General Ban Ki-moon, called on Israel to relax restrictions on Palestinians in the West Bank in order to boost the movement of people and goods, facilitating Palestinian economic development.

The committee pointed to a World Bank report from April that said the Palestinian economy would not grow in 2008 because of the restrictions, such as security roadblocks.

European Union Middle East envoy Tony Blair also attended the meeting. The European Union is the largest donor to the Palestinian Authority, which has been promised $7.7 billion in aid from donor nations over the next three years.

Donors at the meeting said they were disappointed that the two sides had not fulfilled their obligations under the “road map” to peace, in particular that Israel had not curbed settlement expansion.

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