Rather than cursing the Israeli occupation, Palestinian Prime Minister Salam Fayyad, a former World Bank executive, has shifted the focus to building up the Palestinian state. Fayyad’s government has improved security — as Israeli army generals have acknowledged — and the rule of law while also introducing far-reaching reforms in education, health and the economy. In its annual report on assistance to the Palestinian people, the U.N. Conference on Trade and Development estimates that gross domestic product in the occupied territories rose 6.8 percent in 2009. The recently unveiled second-year phase of this plan is titled “home stretch to freedom.”

Palestinians have launched a public relations campaign, “I am a partner,” aimed at the Israeli public. Featuring key Palestinian negotiators, it seeks to debunk the myth that there are no peace partners on the Palestinian side…

Palestinians have good reason to be hopeful about the eventuality of an independent state. If its creation is a result of peace negotiations, good. But if the talks fails because of Israeli obstructionism, Palestinians will have no choice but to declare their state unilaterally and hope the world will recognize it. Those Americans who witness Palestinian conduct in the negotiating room over the coming year will have to decide whether to recognize the state or keep this conflict festering.