Japanese and Middle Eastern leaders have agreed on a project that would bring thousands of badly needed jobs to the West Bank.

The plan to build a Japanese-funded agro-industrial park in the region by early next year will hopefully lay the groundwork for a Palestinian state, leaders from Israel, Japan, Jordan and the Palestinian Authority said on Wednesday.

Saying there was an "urgent need" to improve the lives of ordinary Palestinians, the four sides said in a statement that the project would create jobs and "build trust among all the parties".

The agreement is a timely one for Japan, which hosts next week's summit of the Group of Eight industrial powers and has been striving for a greater role in the Middle East as it seeks to have a bigger role in world affairs.

Sticking to the 'map'

The park, which would export fruit and vegetables via Jordan to the Gulf, would provide jobs for up to 6,000 Palestinians, Japanese officials said.

The country expects to complete a feasibility study in November and "to move into the implementation stage as early as possible in 2009," leaders said.

But the project will require cooperation from the Palestinian, Israeli and Jordanian private sectors, experts said.

And the endeavour is complicated because Israel controls security, water resources and Jewish settlements in the region.

Japan pressed Israel to freeze the construction of settlements and move ahead with a "road map" for peace as outlined by a November summit in Annapolis, near Washington.

Both sides must "execute measures agreed to in the road map including a halt to settlement construction and violence," Masahiko Komura, Japan's foreign minister, said.

"It is also important to alleviate the painful situation of Palestinians living in Gaza," he said.

The Israeli minister said that his country "will continue to abide by the road map and continue to pursue negotiations with the Palestinian side," according to a statement from Japan.

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