The "Middle East Quartet" has endorsed a Middle East peace plan, which would lead to a comprehensive settlement, including Palestinian statehood within three years. The group, which is made up of the United States, the United Nations, the European Union and Russia, made the announcement at the U.N.'s New York heaquarters Tuesday. U.N. Secretary General Kofi Annan said the quartet will continue to work with the parties and other key regional leaders on an implementation plan, adding security performance is essential to ending what he called the "morally repugnant violence and terror."

"But we are all in agreement that the overall plan must address political, economic, humanitarian and institutional dimensions. It should spell out reciprocal steps to be taken by the parties in each of the phases. In short, we need a process that is both performance driven and hope driven."

Mr. Annan also said the plan is to be implemented in three phases. The EU had made the proposal to build on the plan U.S. President George W. Bush outlined in a June speech, in which he called for the creation of a Palestinian state within three years, as well as the ouster of Palestinian leader Yasser Arafat. The first phase of the quartet plan focuses on Palestinian elections and reforms. U.S. Secretary of State Colin Powell said he thinks the Palestinian people understand that Mr. Arafat has not succeeded in moving them any closer to their goal of an independent Palestinian state.

"So, we will not dictate to the Palestinian people who they may choose to have in their legislature or elsewhere in their governing body. But we also have to retain the option in deciding who we would deal with and who we think is an effective leader to move us toward a path that would get us moving toward peace."

The second phase of the plan includes creating provisional borders for a Palestinian state, and a new constitution. The third phase calls for negotiations to create a permanent Palestinian state, with final borders by 2005.