By Adam Entous and Atef Sa'ad

NABLUS, West Bank, Nov 9 (Reuters) - The United States plans to rush aid to the restive West Bank city of Nablus to try to support Palestinian President Mahmoud Abbas's government ahead of a U.S.-sponsored conference on statehood.

Though tiny in U.S. budget terms at around $1 million, the projects are meant to give a facelift to the battered city, a frequent flashpoint between Israeli troops and Palestinian militants, according to U.S., Western and Palestinian officials.

The new U.S. aid push will accompany efforts by Abbas and his prime minister, Salam Fayyad, to exert greater security control in Nablus and eventually other parts of the Israeli-occupied West Bank.

Israel demands that the Palestinian leadership curb militants before it will agree to a final peace and withdraw its forces. The conference expected late this month in Annapolis, Maryland, aims to set terms for relaunching peace talks.

Western diplomats cast the quick infusion of U.S. aid in Nablus as part of a "hearts and minds" campaign to try to bolster Abbas at the summit following his loss of the Gaza Strip in June to Hamas Islamists.

The U.S.-funded projects will rebuild schools, clinics and court buildings, senior U.S. officials told their European Union, U.N. and Russian counterparts at a recent closed-door meeting of the Quartet of Middle East mediators.

"The U.S. is encouraged by steps that the Palestinian security forces are taking in Nablus to restore law and order, and continued progress there will create the environment in which we can launch a number of new development projects," Jacob Walles, the U.S. consul in Jerusalem, told Reuters.

Hamas official Sami Abu Zuhri said the American money was part of an "American-Zionist project to back up the Palestinian president in confronting Hamas".

But it is unclear how much difference the projects can make before the conference.

"Something is coming. What I'm afraid of is that the changes will just be cosmetic," local businessman Samer Anabtawi said.

RISKY CHOICE

Nablus could be a risky starting point. Home to 200,000 Palestinians, it has been a bastion for militants since a Palestinian uprising began in 2000.

Nablus's governor, Jamal al-Mheisen, called the city "the worst for security" in the West Bank and said even Quartet envoy Tony Blair, the former British prime minister, had questioned the decision to start with Nablus.

Mheisen explained the logic behind the focus on Nablus. "It is like the head of the snake. If you control the head, you control the whole body," he told Reuters.

Blair is drawing up his own plans for large-scale development projects in other West Bank cities, some of which will be unveiled before the Annapolis conference.

The mayor of the big southern city of Hebron, Khaled Oseily, said he proposed that Blair help build swimming pools, sports facilities and new housing projects.

In Nablus, Fayyad is preparing to double his deployment of forces by dispatching up to 300 members of the Presidential Guard, the Palestinian Authority's best trained force.

Local residents say there are already some tentative signs of improvement on the streets. Anabtawi said his furniture showroom in central Nablus now stays open until 9 p.m. because the streets feel more secure. It used to close at 5 p.m.

Khaled Saleh, director of the city's main Rafidia Hospital, said he told visiting U.S. officials he needed $500,000 to renovate rundown operating rooms and make other improvements -- some as simple as replacing broken toilet seats.

"There is no doubt that people are tired of promises. They will judge when they see things improve on the ground," Saleh said. "No doubt they'll be happy if they see results this time." (Additional reporting by Haitham Tamimi in Hebron and Nidal al-Mughrabi in Gaza; Editing by Alastair Macdonald and Matthew Tostevin)

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