Following the Annapolis Israeli-Palestinian talks in 2007, Secretary of State Condoleezza Rice appointed a group of private-sector leaders to help ignite economic development in the West Bank. The idea was that the co-chairs would mobilize private sector resources and investment that could benefit the West Bank and bring new hope and prosperity to the Palestinians – all in an effort to facilitate progress toward a two-state solution to peace. The initiative was called the U.S.-Palestinian Partnership (UPP).

Against the backdrop of recent weeks where diplomatic snafus and territorial disputes have fueled tempers and shone a spotlight on the inherent barriers towards progress, I am at an event today in New York City that signals what is working in the region, instead of what has not, and I am feeling very encouraged. Led by the private sector, UPP is announcing a new Middle East Venture Capital Fund that is in many ways the culmination of the work we began in 2007 and gives me great hope for what the future holds.

In less than three years, the U.S.-Palestinian Partnership has facilitated millions of dollars in new youth programs and initiatives from Intel, Cisco, Microsoft, USAID and others; convened hundreds of investors and corporate executives in Bethlehem and Washington through the investment conferences; and co-hosted G-Pals Days with Google for small business owners and software developers to gather in Ramallah to learn new skills and compete for development prizes. And, today I am smiling ear-to-ear because we are in New York to announce and celebrate multi-million dollar lead commitments from the Skoll Foundation and Soros Foundations Network to a new $50 million fund that will bring hope and opportunity to thousands of men and women in the West Bank. These investments follow the European Investment Bank’s (EIB) significant commitment to the fund. Read EIB’s press release about the fund here.

The Middle East Venture Capital Fund will invest in entrepreneurial companies in the Internet, mobile and software sector that are growing out of the substantial community of software and telecom engineers and other entrepreneurs in Ramallah and throughout the West Bank. It will give US and global investors an opportunity to do well while doing good – making meaningful contributions towards creating a viable Palestinian state and getting a valuable financial and social return on investment in the process. And thanks to our partners at the Skoll Foundation, Soros Foundation Network and the European Investment Bank, we are within sight of meeting our investment goals in the fund.

Perhaps I’m so optimistic today because of some history. Many years ago, when I was at AOL, we acquired a young company in Israel called ICQ, which revolutionized instant messaging across the Internet. The investment was not only significant because of the value it added to AOL’s success at the time, and the value it created for the leaders of ICQ, but more importantly because that single transaction with an Israel-based company helped serve as a beacon of the burgeoning innovation and talent in Israel in the early days of that country’s efforts to grow an ICT sector. Since that early investment, a technology boom has taken place in Israel, and today the ICT sector has become a cornerstone of the Israeli economy. I can’t help but see the potential of history repeating itself as this new fund goes forward. In addition to a highly-educated workforce, low infrastructure costs and a burgeoning technology sector, the same entrepreneurial spirit and innovative thinking is alive and booming in the West Bank.

While the private sector can’t do much to address diplomacy or security, it can play an equally important role through the contribution of resources and investment to the region. It has been a complete delight to see the undaunted courage of private sector leaders who’ve stepped up and in the midst of troubles and strife, have made commitments to go forward with this important work in the West Bank. There is a passionate belief that there’s really money to be made here, but these leaders are equally excited about the potential for the prosperity and stability these investments might help enable. These good things only happen when people come together with commitment and passion – I am enormously grateful to those who have stepped up early and to those who are at the table with us now looking at future investments.