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MARK AUSTIN THOMAS: This morning U.S. Secretary of State Condoleezza Rice ended summit talks in Jerusalem. She met with Palestinian President Mahmoud Abbas and Israeli Prime Minister Ehud Olmert. The summit was aimed at restarting the Mideast peace process but without producing tangible results. Reuters is reporting that before the talks began, Rice said the process was not something she expected to move quickly. But as Orly Halpern reports from Jerusalem, with the passage of time, certain economic risks increase.

ORLY HALPERN: In brief remarks after the meeting, Secretary Rice did not mention the economic boycott against the Palestinian government, imposed when Hamas was elected to power last year.

Since then, Palestinian GDP has fallen 10 percent and the economy is sliding deeper into recession.

Dr. Bassim Khoury, Chairman of the Palestinian Federation of industries, says the situation must improve before peace can prevail.

DR. BASSIM KHOURY: We will not succeed politically, we will not succeed in the peace process, unless we succeed in building a different economic reality in Palestine.

Palestinians say that in addition to the loss of financial aid, their economy is being severely impacted by Israeli restrictions blocking the movement of Palestinian people and goods.

Many Palestinians wait in lines for hours to get to their jobs, produce rots and merchandise remains unsold.

While Israel has twice agreed to remove roadblocks and checkpoints, the Israeli media says that has not happened.

The issue was on today’s agenda and Palestinians remain hopeful.

In Jerusalem, this is Orly Halpern for Marketplace.