Economic development in the Palestinian Authority will strengthen the population and its leadership, thus giving a strong push to diplomatic negotiations between Israel and the Palestinians, Quartet Middle East envoy Tony Blair said Wednesday during a meeting with President Shimon Peres. The two were meeting to discuss further steps which can be taken toward improving the Palestinian economy. Blair told reporters that despite causes for concern over continuing rocket attacks from the Gaza Strip, it was important to keep focusing on economic potential. Many industrial projects were making progress, he said. "There's an awful lot we can do. None of it is a substitute for political negotiations and the political process, but economic progress can supplement the political process." He added that the coming year was critical in advancing this issue. The more economic potential that could be offered for the future, Blair said, the better the chances of resolving the political situation. Peres stated that he was very pleased that Blair was back in the region to aid the economic effort. "There's very little we can do in Gaza but a lot which we can do in the Valley of Peace, where a great deal of investment can be injected," Peres said, referring to an economic project he has championed in the Dead Sea area, which is intended to increase regional stability and cooperation. "We must turn the [planned industrial zones in the West Bank] into a pilot that will demonstrate how economic initiatives can be advanced in conjunction with upholding security," Peres said. The two also discussed Kassam attacks and IDF responses in Gaza, the state of bilateral negotiations with the PA and Israeli political developments.