The New Nation - Internet Edition

AFP, Ramallah

After a year as the Palestinian Authority's prime minister, Salam Fayyad is pessimistic about a peace deal with Israel, saying the accelerated construction of Israeli settlements largely strips the negotiations for Palestinian statehood of meaning.

Yet Fayyad, an economist by trade and a pragmatist surrounded by ideologues, refuses to give up.

In an interview at his office Sunday, Fayyad said he'll keep trying to improve life in the West Bank in small steps regardless of the fate of the U.S.-backed peace efforts. He hopes to break what he described as a culture of defeatism among Palestinians, nurtured by decades of Israeli occupation, and instead to instill a sense of the possible.

"The way we end it (occupation) is by this t spirit of positive defiance, to build despite the occupation, do what we can," he told The Associated Press. Fayyad, a former official at the International Monetary Fund who lived in the U.S. for 20 years, was appointed by Palestinian President Mahmoud Abbas a year ago to replace Ismail Haniyeh of the Islamic militant Hamas. Abbas fired Haniyeh, now the premier of Hamas in Gaza, after Hamas' violent takeover of the territory.

But Fayyad's list of troubles seems to be getting longer.

Hamas remains entrenched in Gaza, while Abbas' increasingly disgruntled Fatah movement is becoming more vocal in demands to be included in Fayyad's government of independents and experts.

Israel balks at easing movement restrictions for the Palestinians - a prerequisite for the recovery of the Palestinian economy - and Israeli soldiers continue to carry out raids in cities where Fayyad's forces are trying to establish control, saying the Palestinians aren't ready yet to handle security on their own.

Fayyad is skeptical about Palestinian prospects for independence.

The peace process is "being trampled upon" with Israel's accelerated settlement construction, including the latest plans, disclosed Sunday, for 900 more apartments in disputed east Jerusalem, he said. Both sides claim the area where the building is to take place.

"Believe me, I would want this (a peace agreement) to happen today before tomorrow, but I am really at a loss trying to really find reasons to be encouraged or optimistic, especially because the pace (of construction) has picked up so much," he said.