The conference had just started when U.S. Secretary of State Condoleezza Rice intervened for the first time. Although the protocol had left no room for debate, Rice spoke up after Arab League Secretary-General Amr Mussa had indicated the West should start negotiating with Hamas, the Sunni Islamist group that is labeled a terrorist organization by the United States and the European Union and, at the same time, is the legitimately elected leadership of the Palestinian National Authority.

"You cannot have peace if there is not a partner who respects the right of the other partner to exist," Rice said in an obvious reference to Hamas, in the first tense exchange at the one-day conference in Berlin's Foreign Ministry.

She later received backing from German Chancellor Angela Merkel, the conference host: "We should not give up the Quartet criteria," that demand from Hamas to renounce violence and accept Israel's right to exist, "which are the basis for every cooperation."

French President Nicolas Sarkozy, currently touring the Middle East, gave his backing to that strategy Tuesday at a news conference in Bethlehem: "We talk with the people of peace, and not with the ones who place bombs," he said.

Yet most of the talking was done in Berlin, where Merkel had invited political leaders from all over the world, including Israel's Foreign Minister Tzipi Livni, her Russian colleague Sergei Lavrov, Palestinian Prime Minister Salam Fayyad, Tony Blair, the special envoy of the Mideast Quartet, as well as representatives from the United Nations, the European Union and the Arab League.

Sadly, the conference was overshadowed by violence in the Middle East, where a six-day truce between Israel and Palestinian militants was broken Tuesday. Reports came in that two rockets fired from the Hamas-ruled Gaza Strip hit Israel in what the terror group Islamic Jihad said was an act of revenge for an Israeli military raid earlier that day in Nablus, a city in the northern West Bank.

Nevertheless, representatives from more than 40 states in Berlin pledged to contribute some $242 million over the next years to improve the West Bank's justice and security sector.

"Every link in what we call the chain of security must be intact and unbreakable," Rice said at the conference. "To feel invested in a future state, Palestinians must have confidence that their police, courts and penal system are dedicated to upholding the rule of law and respecting human rights."

Merkel said the money was a small tessera in a larger unfinished mosaic -- the Quartet's two-state solution. The idea is simple: A two-state solution can work only if the Palestinian territories are secure and able to swiftly bring criminals and terrorists to justice.

Of course, this means taking the second step before the first (which would be the establishment of a Palestinian state), yet observers say an efficient police and justice sector is a prerequisite for peace in and around what may be Palestine. Fayyad, the Palestinian prime minister, said the roughly 7,000-strong police force in the West Bank would be modernized and beefed up.

The EU already trains police there, but that mission should be expanded with the additional money, officials said.

While all conference participants praised the commitment of the donor countries, Arab leaders called on Israel to stop the expansion of settlements and remove the roadblocks in the West Bank.

"The Palestinian people needed to taste freedom," Fayyad said. "They need to feel tangible improvements in their daily lives."

The Berlin conference is a follow-up to the peace process revived last year in Annapolis, Md. Observers say it not only aimed to accompany that process with financial backing (a major donor conference in Paris last December already generated massive amounts of aid money), but also show the Arab states that Germany, despite its strong siding with Israel, can be trusted.

"This is not just another Mideast conference," Merkel said. "It has the very special task to help build a Palestinian state."

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