London is due to host a meeting in March on Palestinian reform which Blair says could ease the planned Israeli withdrawal from Gaza and lay foundations for a return to the "road map" for peace.

But some senior Palestinians, including Prime Minister Ahmed Qurie, have attacked the meeting and demands for reform, arguing instead for a full-scale peace conference with Israel.

"If Europe is going to put in money we need to know that money will be properly used, (that) there will be changes in security and political structures of the Palestinian Authority," Blair told a Downing Street news conference on Thursday.

"I think the Palestinians have had enough sympathy -- it's not sympathy they need, they need someone to act, and that's what I'm trying to do," he said.

He acknowledged Palestinian concern over the meeting but argued that reforms on the Palestinian side were needed first, backing the position of both Israel and the United States.

"We are not going to get a peace conference with the Israelis until we do the preparatory work. It's not going to happen," said Blair, who visited the region last month.

The London meeting will attempt to make those preparations and clear the way for final status negotiations, which is what the Palestinians want, he said.

Other senior Palestinian figures, including the moderate Mahmoud Abbas, frontrunner to win Sunday's presidential election for a successor to Yasser Arafat, have welcomed Blair's initiative.

March's one-day meeting of U.S, European and United Nations leaders, Arab states and the World Bank is aimed at assessing ways to make Palestinian institutions more democratic, less corrupt, and equipped to rein in militants who have resisted truce proposals from moderates.

Diplomats have said Blair's conference idea was scaled down from grander plans for a meeting to help revive Middle East peace efforts.