Watch Tony Blair at the Berlin Conference

A special conference in Berlin has earmarked £121m to help the Palestinian Authority build up its security capability.

The conference, which was proposed by Quartet Representative Tony Blair and organised by the German government, saw delegates from more than 40 countries approved funding for the police force, judges, courts and prisons.

The PA presented a list of projects that it needed help on to the conference, which Tony Blair described as "proper and comprehensive".

Tony Blair, speaking in Berlin, said that a functioning criminal justice system was "fundamental for a two-state solution".

"This is not just about forces with guns, it's about a proper functioning criminal justice system, it's about courts, the prosecution service, the prison service, it's about the whole infrastructure that goes to make up the criminal justice system and a state.

"There will never be a two-state solution just by people sitting in a room negotiating. A state will only be created when people take the action to create the reality that allows a state to be credible, credible for the Palestinians, credible for the Israelis," he said.

"Therefore, a major part of resolving the Israeli-Palestinian dispute is for the Palestinians to build genuine Palestinian security capability.

"If the Palestinians aren't capable of providing their own law and order and their own defence against anyone who wants to engage in terrorism, then it's difficult to see how the Israelis will agree to a Palestinian state."

Palestinian Prime Minister Salam Fayad, said he saw the conference as a sign of "enthusiastic international consensus in support of the Palestinian people for freedom".

Mr Fayyad said the rule of law was key to improving the lives of Palestinians and that "security is the most important service any government should provide its citizens."