CNN - Atika Shubert - Business should be improving for the Abu Lafi Stone and Marble Company.

Based in the West Bank city of Hebron the company is well placed to take advantage of the construction boom promised by more than $500 million worth of new projects slated for the area.

Israel has also lifted one roadblock in Hebron that makes transporting goods easier.

Even so, Abu Lafi owner, Lafi Gaith still finds it difficult to transport the huge blocks of white marble his company sells across the Palestinian territories by truck.

He says 80 percent of his business goes to Israel because the checkpoints and roadblocks scattered across the West Bank make it too time consuming and costly to deliver to Palestinian clients.

"The city is completely divided with roadblocks everywhere," Gaith said, "If the Israelis lift the blockades things will get better. But it's not enough to lift just one checkpoint."

According to the United Nations, there are more than 500 roadblocks across the West Bank in addition to Israel's security barrier. Gaza is sealed off by an Israeli blockade which only allows humanitarian supplies past.

The Israeli government says the barriers are a necessary security measure, and have dramatically reduced the number of militant attacks inside Israel.

The increased security comes at an economic cost to the Palestinians.

The World Bank says the Palestinian economy grew zero percent last year -- due largely to restrictions on freedom of movement for Palestinians.

These were the political obstacles faced last week during the Palestine Investment Conference. Mideast Quartet representative and former British Prime Minister Tony Blair presided over the talks in Bethlehem.

Since taking up the role of envoy for the Mideast Quartet -- comprised of the United Nations, European Union, Russia and the United States -- Blair has focused his efforts on improving the economic situation in the Palestinian Territories.

During the conference he was hoping to find investors for more than 100 projects.

In December, international donors pledged nearly $8 billion in Palestinian aid but called for an investor conference to encourage the private sector.

Hundreds of potential investors attended -- many of whom were Palestinians living overseas. Encouraged in part by tax incentives and legal guarantees put in place by the Palestinian Authority, members of the Palestinian diaspora looked to put money back into their homeland.

Juan Daboub, Managing Director of the World Bank in the region, is from El Salvador but his grandparents came from Bethlehem.

"We have roots here," he says, but more importantly it also represents a strategic business opportunity in the region. "Nobody should come here to do altruism from the business perspective. They should come because it makes business sense."

According to the Doing Business project which is part of the World Bank, the Palestinian territories are ranked 22nd out of 178 countries for ease of tax payments and 33rd for legal protection of investments.

There have been some business successes -- particularly in construction.

Qatari government-backed Diar Real Estate announced plans to build an entire town in the West Bank, costing an estimated $350 million with the help of Palestinian partner Massar International.

It will be the biggest project in the Palestinian Territories since the 1967 war, according to Massar International.

"We're not investing because we're optimistic. We're investing because there is a need to invest," explained Bashar Masri, CEO of Massar International, "We have done business in the West Bank and in Gaza in high risk and for the most part we have done very well. Others can do very well like us."

But for smaller businesses, the political hurdles are still great.

Standing next to the finely veined slabs of marble in his polishing factory, Lafi Gaith says he hopes the new construction projects will bring him more business but more importantly political stability.

"Any investment in the West Bank is good. But we need stability," Gaith said, "There is no alternative to stability to create a flourishing economy.


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