Secretary of State Condoleezza Rice met Tuesday with Palestinian Authority Finance Minister Salam Fayyad on economic distress in the West Bank and Gaza. Fayyad disclosed the meeting at a news conference at the Palestine Center a few blocks from the State Department. He said they talked about ways to ease the Palestinians' economic problems, including changes in its banking system. The aim is to regulate and simplify distribution of contributions from around the world. "Things are evolving in a positive way," he said. The United States and the European Union ruled out direct assistance to the Palestinian Authority last year after Hamas was elected to a leading role in the Palestinian government. But humanitarian assistance can go directly to Palestinian projects. US and European officials also have ruled out meeting with Hamas officials. Fayyad is a member of the independent Third Way party and met last month with Jacob Walles, the US consul in Jerusalem. Praising Rice's diplomatic efforts, Fayyad said, "We are encouraged by the effort Secretary Rice has been making to re-engage the parties." The United States and Israel have ruled out negotiating with a Palestinian government that includes Hamas, which they consider a terror organization. Fayyad, an internationally respected economist, was in Washington primarily to attend the spring meetings of the International Monetary Fund and World Bank, where he once worked. "Poverty is widespread," he said. "Nearly two-thirds of the people in Gaza live below the poverty level." "There is suffering everywhere," he said. "The time has come for it to be resolved." Fayyad said the Palestinians were victims of Israel subjugation, but added: "We do have to begin trying to help ourselves" and do not want to assume the role of "international beggar." In responding to questions, Fayyad expressed his commitment to a Palestinian state that lives in peace alongside Israel. Initially Fayyad met with David Welch, the assistant secretary of state for the Near East. The Palestinian official said Rice had joined the meeting.