Prime Minister Paul Martin announced that Canada will contribute $24.5 million in assistance to the Palestinian Authority for education, living conditions for refugees, and economic development.
Martin made his announcement at a hastily-called news conference at the 60th United Nations General Assembly in New York.
"Anything that will lead to peace in the Middle East should be encouraged," Martin told reporters.
Donor countries are expected to pour about $5 billion a year into aid for the Palestinian economy.
When Palestinian President Mahmoud Abbas visited Ottawa in May, Canada committed $12.2 million for peace and security.
"I told Abbas to consider this a down payment today," Martin said. "We have a unique opportunity to help Palestinians work toward."
The additional funding comes after Israel's successful withdrawal from the Gaza Strip and parts of the northern West Bank.
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