The plan faces significant practical hurdles and raised worries that Mr. Fayyad was advocating the sort of unilateral actions toward statehood long opposed by the U.S. and Israel. Implementing it would mean overcoming likely Israeli opposition to key elements and Mr. Fayyad's own weak domestic political standing, and would also require hefty financial-aid commitments from foreign donors, such as the U.S., European Union, and Arab states.
But the plan also reflected an unprecedented Palestinian emphasis on the nuts and bolts of self-rule. It lays out the broad outlines of a state on Palestinian lands occupied by Israel in 1967 with East Jerusalem as its capital, and details each government ministry and its functions.
It also calls for a Palestinian airport in the Jordan Valley, tax incentives to attract foreign investment, and the bolstering of competent security services capable of keeping law and order.
"The Palestinian government is struggling against a hostile occupation regime to establish a de facto state apparatus within the next two years," Mr. Fayyad said at a news conference in the West Bank city of Ramallah. He then added that "this can and must happen within two years."
The release of Mr. Fayyad's plan comes on the eve of a meeting Wednesday in London between Mr. Netanyahu and Washington's special Mideast envoy George Mitchell. The two are negotiating an agreement that would require some degree of a freeze on building in Jewish settlements in the West Bank and restart peace talks.