The world rallied to the support of the Palestinians yesterday, pledging billions of dollars in aid at a donors' conference in Paris and urging everyone in the region to grasp the chance offered at the recent Annapolis conference for an Israeli-Palestinian peace deal. Some 90 countries attended and many responded generously to the call by the Palestinian Prime Minister for $5.6 billion between 2008 and 2010 to pay off Palestinian debts and inject a cash lifeline into the stuttering economy. The target will probably be met, even if many of the donors, especially the Arab countries, are better at promising than delivering.

Raising the money is only a first step, however. What is desperately needed is a return to more normal economic activity in Gaza and on the West Bank. And that depends far more on politics, security, trust and goodwill than on simple cash. For now, hopes for progress in Gaza remain bleak. Since Hamas forced out the Palestinian Authority and renounced the rule of President Abbas, Israel and Egypt have sealed the borders, money, fuel and energy supplies have dried up and 75 per cent of the 1.5 million people in the crowded strip live in poverty. Hamas shows no willingness to compromise, to recognise Israel or to seek reconciliation with Mr Abbas.

Things might be easier on the West Bank, and both the Israelis and the West are determined to help Mr Abbas to demonstrate the fruits of his readiness for dialogue.

But Israeli restrictions on travel and movement are a huge obstacle to normal economic activity, and despite repeated promises that these will be eased, most remain as burdensome as ever. Travelling even short distances is frustrating, time-consuming and sometimes impossible. Israel has very real concerns about the safety of its people but, as the World Bank said yesterday, until it eases the physical and administrative restrictions, the Palestinian economy will not recover, however ambitious the development projects might be and however thorough the proposed economic reform package. Aid money will, instead, be frittered away in paying government salaries and satisfying daily needs.

Unless and until entrepreneurs are able to rebuild their businesses, export to neighbouring countries and create wealth to lift unemployment, Palestinians will remain reliant on world charity. The fatalism of a beggar mentality will be matched by frustration that will do little to foster political stability or social cohesion. Israel understands this, and yesterday called Mr Abbas's economic reform plans a basis for a responsible Palestinian state.

The difficulty, however, is that while politicians speak of their “road map” obligations, security officials demur at any easing of restrictions that they fear could allow a renewed upsurge of terrorism. Israel has every right to take those steps needed to ensure its security. Creating the necessary Palestinian interest in stability would, after Annapolis, be more effectively achieved if daily life were freer.

Tony Blair, a co-sponsor of yesterday's conference, has underlined this point, and is well placed, as an envoy trusted by the Israelis, to convey the point to them. The scale of the funds pledged shows the global interest in ending this long and bitter conflict. Those on the ground must now put this money to good use.