Tony Blair may have slipped silently into the offices of various Palestinian leaders in Ramallah, but on the streets the small-business owners — the people he must support, if he is to bolster the Palestinian economy — had plenty to say on the way ahead.

“The economy here is very bad,” said Khaled, 27, who owns two shops selling sports shirts, off central Manar Square. “The employees of the Palestinian Authority are not getting paid, and that reflects on business all along the street.”

“This is the summer season, business should be booming, but look around, the economy is zero,” said Nadir Abu Laban, who runs a falafel restaurant by the square.

As part of the goodwill gestures designed to strengthen the position of Mahmoud Abbas, the moderate Palestinian President, who met Mr Blair yesterday, Israel recently freed up more than $1 million in frozen Palestinian tax revenues. The money was used to pay civil servants who had not received salaries for months, but it has failed to do much to an economy stifled by checkpoints, closures and 18 months of embargo imposed when the radical Islamist movement Hamas won elections.

“If you pay the Palestinian Authority clerks 1,000 shekels (about £120) and they have debts of tens of thousands of shekels, how will that help?” asked Abu Laban.

There was some hope that Mr Blair, as the new head of the international Quartet dealing with the Middle East, and made up of the United States, United Nations, European Union and Russia, might be able to achieve some progress in rebuilding the shrunken Palestinian economy.

“He has to put pressure on Israel to give us freedom,” said Abu Laban, expressing doubt about Mr Blair’s ability to make much headway, given the disastrous war he left behind in Iraq. “People here just want a normal life.”

Khaled said that Mr Blair might be able to make progress, since ordinary Palestinians have set their sights much lower since the intifada, or uprising, failed to win them anything. “We used to talk about Jerusalem, and the right of return of the refugees. Now we are just talking about our salaries,” he said.

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