Palestinian Prime Minister Salam Fayyad said in an interview Tuesday that he has won broad international support for his plan to ready the Palestinians for statehood within two years.

However, Fayyad sidestepped the question of whether the Palestinians would unilaterally declare statehood at the end of that period if a peace deal with Israel is not in place. He said that decision would have to made by the Palestine Liberation Organization and others when the time comes.

With peace efforts deadlocked, Fayyad's two-year plan to build up and reform governing institutions may well offer the Palestinians the only practical prescription for moving closer to statehood.

Israel and the Palestinians remain far apart on what it would take to resume peace talks. The gaps were highlighted during Tuesday's first meeting between Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas, hosted in New York by President Barack Obama.

While Netanyahu and Abbas faced off at a hotel in midtown Manhattan, Fayyad lobbied for his plan in a meeting with donor countries on the sidelines of the U.N. General Assembly.

Donors have funneled billions of dollars in aid to the Palestinians over the years, and Tuesday's meeting was meant to assess the aid program and make up pledging shortfalls.

The huge sums have been less effective than donors had hoped, in part because they were spent to soften the economic damage stemming from Israeli restrictions on Palestinian trade and movement, rather than on development projects.

Fayyad's program, unveiled a month ago, proposes beefing up or reforming government ministries and institutions of the Palestinian Authority, the self-rule government in the West Bank. The plan also envisions several major projects, such as an international airport.

The West Bank remains under Israeli military occupation and the Gaza Strip is controlled by the Islamic militant group Hamas. But Fayyad said this should not keep Palestinians from working for their state.

"Part of what this is intended to do is to break that psychological barrier associated with having ... statehood being talked about for so long now, with it not happening," he said.

However, Fayyad would not say how he expects to get around major obstacles to his vision, such as Hamas rule in Gaza or the need to get Israeli approval for major projects.

Fayyad was appointed by Abbas as prime minister two years ago.

Since then, the Western-educated Fayyad, a respected economist, has ended vigilante rule in former militant hotspots and cracked down on Hamas' West Bank operations.

In recent months, the Palestinian economy in the West Bank has seen a modest upturn, after years of shrinking, in part because of an easing of Israeli restrictions on Palestinian movement and the influx of foreign aid. The economy in Gaza has been crippled by a two-year border blockade imposed by Israel and Egypt after the Hamas takeover.