The annual spring meeting of Palestine's donor coordination group kicked off in Brussels Wednesday, the day after UN officials came out in support of an independently functioning Palestinian state.

EU foreign policy chief Catherine Ashton is hosting the Ad Hoc Liaison Committee meeting, also attended by caretaker West Bank Prime Minister Fayyad, and Quartet Envoy Tony Blair.

Fayyad's state-building plan and President Mahmoud Abbas' diplomatic efforts, which have secured recognition of a Palestinian state on the 1967 borders, appeared to give Israel pause, with reports Tuesday suggesting Israel's Prime Minister Benjamin Netanyahu would consider a West Bank pullout, in order to re-shuffle the political cards in fear of an independently declared Palestinian state.

Ahead of the AHLC meeting, Ashton echoed praise for the progress of the Palestinian Authority government, but stressed that "these achievements can be sustainable only if they are matched with progress in the peace talks."

Fayyad tells donors 'we are ready for statehood'

International support has played a "vital role which enabled us to complete our plan to build institutions and infrastructures for the state of Palestine," Fayyad told delegates at the conference on Wednesday morning.

"This committee provides not only technical support, but political [support], as well helping us realize our national rights,” he said.

Fayyad applauded the UN, the International Monetary Fund, and the World Bank for their recent reports praising the PA’s performance and confirming its readiness for statehood.

“When these international organizations applaud the PA for administrative and governance performance, and when they confirm that Israel [has] impeded PA’s efforts to achieve sustainable development, this is further evidence that Israeli occupation is the major obstacle before Palestinian state," he noted.

He continued: "For that reason, the international community should necessarily take tangible steps binding Israel to stick to international law and resolutions to end occupation of all the Palestinian territories, and enable our people to establish an independent state on the territories occupied in 1967 with Jerusalem as its capital,"

EU to sign trade agreement with PA

A statement from the EU noted that on the sidelines of the committee meeting, Ashton and Fayyad will sign a Duty-Free, Quota-Free Agreement, giving immediate access and full liberalization for Palestinian products to the EU market, for a transitional period of 10 years, with possible further extension in time.

The agreement includes all agricultural products, processed agricultural products and fish and fishery products originating in the West Bank. and Gaza Strip.