British Prime Minister Gordon Brown says boosting the Palestinian economy is vital to achieving an Israeli-Palestinian peace deal.

Mr. Brown said Sunday Britain will give another $60 million in aid to the Palestinians, whose economy has been ravaged by years of conflict with Israel. He was speaking on his first visit to Israel and the West Bank since taking office.

Mr. Brown met with Palestinian President Mahmoud Abbas in Bethlehem and later spoke with Israeli Prime Minister Ehud Olmert in Jerusalem.

The British leader called on Israel to stop expanding Jewish settlements in the occupied West Bank, saying such activity erodes trust with the Palestinians and heightens their suffering.

Mr. Olmert said Israel and Britain disagree on the settlement issue and expressed hope that Britain better understands why Israel allows communities to keep building.

Mr. Brown traveled to Bethlehem with a British trade delegation. British officials there called on Israel to ease travel restrictions in the West Bank that have hindered Palestinian commerce. Israel says its West Bank checkpoints are necessary to prevent Palestinian terror attacks.

Mr. Brown also announced that London will host another international investment conference for the Palestinians later this year. He continues his visit to the region with an address to the Israeli parliament Monday.

Mr. Olmert and Mr. Abbas relaunched peace talks last November with the goal of reaching such a deal by the end of 2008.

Some information for this report was provided by AFP, AP and Reuters.