RAMALLAH, West Bank, April 1 (Reuters) - The Palestinian government and private sector will host a major investors conference in Bethlehem on May 21, organisers said on Tuesday.

The idea of holding the conference, part of efforts to boost the economy as Palestinians take part in U.S.-backed peace talks with Israel, was first disclosed in December by British Prime Minister Gordon Brown and endorsed by major powers.

Palestine Investment Conference CEO Hassan Abu Libdeh told reporters that 300 foreign businesspeople and dignitaries had been invited to attend the three-day event. Some 120 have accepted so far, most from Arab states but some from Europe.

The meeting at Bethlehem aims to follow on from a gathering of foreign governments and international institutions in Paris in December, when $7.7 billion in aid was pledged to the Palestinians over the next three years.

Palestinian Prime Minister Salam Fayyad said holding the event for private investors in the Israeli-occupied West Bank was in itself a signal to the world that it was possible to do business in the Palestinian territories.

Under pressure from the United States, which wants to see a deal on Palestinian statehood by year's end, Israel said this week it would ease access to Bethlehem for the conference.

Abu Libdeh said the Palestinian private sector would fund 25 percent of the conference while Abbas's Palestinian Authority would pay the rest.

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