Geneva  - The Palestinian Authority would seek observer status at the World Trade Organization as part of a process of building state institutions, a minister said Tuesday.

"We are seeking observer status at the WTO, as a preparation for statehood," said Basim Khoury, economics minister in the Palestinian Authority, which is based in Ramallah.

"We would like Palestine to be open to the world," he said, adding that eventually the government would strive to have full membership in the trade body.

Khoury was scheduled to meet with WTO chief Pascal Lamy later Tuesday.

The process of joining the WTO would require the Palestinians to undergo reforms, some of which are badly needed in any event, Khoury said. The move is part of the PA's plan to build fully functioning government institutions.

Palestinian Premier Salam Fayyad said last month he intends to create all the institutions of statehood so that a Palestinian state can come into being in two years, even if peace talks with Israel fail or remain stalled.

Israel has objected to a unilateral declaration of statehood.

Khoury was speaking to reporters on the sidelines of a meeting of the United Nations Conference on Trade and Development, which has a special programme of assistance for the Palestinian people. Part of UNCTAD's aid goes to reforms needed to facilitate the movement of people and goods.

The Palestinians have an observer seat at the UN, which grants them a right to speak, but no voting powers.

Joining the WTO fully could take five years or longer, Khoury said. The organization, which aims to liberalize trade, has a plethora of rules, regulations and requirement for membership. Adjusting to them can take an extended period of time.

Khoury said he did not expect an Israeli objection to his quest for observer status, saying the WTO was a technical and economic organization that did not deal with political issues.

Israel is part of the WTO, which has 153 members, not all of which are states. (dpa)