As the Palestinian leadership headed by Prime Minister Salam Fayyad prepare for Monday’s donor conference in Paris, the Palestinians on the ground are reeling from the continuing violence that is wracking the West Bank and Gaza.

On Friday, four people were killed, reportedly by a hand grenade thrown into a crowd of mourners during the funeral procession of Khalil Masariyi in Gaza City. Another 34 people were wounded in the incident. The leadership, Fateh in particular, is pointing the finger at Hamas, claiming its armed members carried out the attack. Deposed Hamas Prime Minister Ismail Haniyeh begged to differ, angrily accusing Fateh, saying the bloody attack was part of its conspiracy to destabilize Hamas and spread chaos.

Masariyi was killed the day before in an Israeli army attack in the city. His was by far not the only death this week, however, caused by Israeli attacks in the Gaza and the West Bank. On December 13, three people were killed in Gaza City, when an Israeli air missile struck a taxi cab, apparently targeting an Al Quds Brigades member, the military wing of the Islamic Jihad. With him, one other passenger and the cabdriver were also killed.

On December 12, another Al Quds Brigades activist was shot and killed while firing a rocket at the Kissofim military base on the Israeli-Gazan border while a day earlier on the 12th six Al Quds Brigades activists were killed in an early morning Israeli incursion into the Strip. Six others were wounded in the raid, including an Associated Press journalist.

On December 7, a farmer from Khan Younis was shot and killed on his way to his land, which is located along the border strip between Gaza and Israel. The Israeli army shot at the man, believing he was in the area to execute an operation against Israeli targets.

The recent Palestinian deaths along with Israel’s unfettered plans to continue settlement expansions in the West Bank have put a damper on recently launched final status talks and on the upcoming donor country meeting in Paris on December 17.

With the ink barely dry on the Israeli pledge in Annapolis to halt settlement expansion, Israel this week approved the construction of over 300 new housing units in the east Jerusalem settlement of Har Homa, known as Jabal Abu Ghneim to the Palestinians. The announcement, which raised the discontent of the United States and the ire of the Palestinians, was made just days before the first final status talks were launched in Jerusalem on December 12.

Israel maintains that Har Homa falls within the Jerusalem municipality borders – borders which were unilaterally demarcated by Israel after its illegal annexation of the city in 1967, and thus does not apply to pledges made in Annapolis, which refer to West Bank settlement expansion.

Israel seems to be exploiting this semantic ambiguity to the max, announcing in December 14 that it was reviving a previous plan to build Road 45. This road, which cuts through east Jerusalem neighborhoods such as Abu Dis and Walaja, is ostensibly to create a road that would connect Ramallah to Bethlehem by completely bypassing Jerusalem.

The Palestinians, however, say the plan is just one more Israeli scheme to grab more Palestinian land around Jerusalem. Palestinians say the road, if constructed, would require the confiscation of thousands of dunams of land from Palestinian neighborhoods in Jerusalem such as Sur Baher, Jabal Al Mukabber and Ras Al Amoud, in addition to the demolition of several homes along its path.

Israel also leaked a plan to build 7,000 new housing units in the Ein Yayal area near Walaja, east of Jerusalem.

Furthermore, the Israeli settlement movement is on the move, attempting to establish as many outposts as possible in the wake of a possible peace agreement between the Palestinians and Israel. On December 9, settlers established eight new settlement outposts in the West Bank, namely between Jerusalem and the Maaleh Adumim settlement, the Hebron-area town of Halhoul and in Nablus. Although Israeli border police and army soldiers prevented the settlers from bringing in heavy equipment and mobile homes to the area, there were no major skirmishes between the two, with the settlers vowing to sleep on the grounds if necessary.

It was this point, among several others, the Palestinians raised with their Israeli counterparts during the first final status meeting since Annapolis on December 12. The two sides met in Jerusalem for 90 minutes and emerged from the meeting virtually empty-handed. The Palestinians showed their dissatisfaction with Israel’s recent settlement moves and also called on Israel to halt its repeated incursions into Gaza, lift the siege on the occupied territories and halt attacks and assassinations. The Palestinian delegation, headed by Ahmad Qurei’ called on Israel to rescind its decision to expand the Har Homa settlement in compliance with its roadmap obligations.

Israel also voiced its grievances, citing the security situation as its number one concern. The delegation charged the Palestinian leadership with being unable to take control of security in the West Bank or Gaza, saying the rockets launched from the Strip are continuously increasing.

Hence, it is no surprise that one unnamed Israeli source was quoted in the Israeli press as calling the first final status negotiations meeting a “failure.” The teams are scheduled to go to round two after the Eid Al Adha and Christmas holidays.

While the political track has not yet shown much promise, at least Palestinians are feeling somewhat optimistic about the upcoming meeting of donor countries in Paris. The meeting, which will be attended by some 90 countries and international agencies, is expected to announce $5.6 billion in aid to the Palestinians over the next three years. According to a French source, 80 percent of the money has already been guaranteed. In addition, the Palestinians received an additional perk when French Presidential spokesperson David Martinon said France would refer to the Palestinian territories hereafter as the Palestinian state. “We wanted to rename this conference by changing the term of Palestinian Territories into Palestinian state to take into account the progress in the Annapolis Conference," Martinon said.

Prime Minister Fayyad and the Palestinian delegation arrive today in France in preparation for Monday’s meeting, which is being perceived as a major jumpstart to economic development in the Palestinian territories. Fayyad is expected to outline what is called the “Palestinian Reform and Development Plan”, which will address not only economic by security and political issues.

The World Bank will be pleased to hear this, especially after its report released this week on the situation in which it warned that donor aid alone will not be enough to revive the Palestinian economy if Israel continues with is restrictions on trade and transportation in the West Bank and Gaza.

The International Committee of the Red Cross had a similar message on December 12, saying Israeli restrictions had caused a humanitarian crisis in the West Bank and Gaza, which is only growing worse. It called on Israel to halt its “retaliatory measures”, which are paralyzing life in Gaza, while also urging the Palestinians to halt their rocket attacks against Israeli civilian areas.

Quartet Committee envoy Tony Blair is also putting efforts towards pushing the peace process forward, especially on the economic track. On December 13, he, President Abbas and Israeli Prime Minister Ehud Olmert met in Jerusalem to discuss mechanisms for implementing economic projects including industrial zones in Jericho and Tarqumiya, a sewage system project in Gaza along with several other projects.

On December 12, speaking at Bethlehem’s Intercontinental Hotel, Blair said Israeli settlements were not conducive to the peace process. Earlier in the week, he also said during a radio interview that a visit to Gaza was in his future plans, stressing that Gaza and the West Bank must be one unit, not two.