By David Lawder

WASHINGTON, May 20 (Reuters) - U.S. officials said on Tuesday they aim to address economic roadblocks in the Palestinian territories -- including actual Israeli roadblocks and security risks -- at an investment conference in Bethlehem this week.

The Palestine Investment Conference will include announcements of hundreds of millions of dollars in public-private business grants, loan guarantees, venture capital funds and affordable mortgages to spur the Palestinian economy, officials from the U.S. delegation told a news briefing.

"The conference is intended to spur investor interest in the Palestinaian Territorites by showcasing business opportunities and projects ready to be launched," said Deputy U.S. Treasury Secretary Robert Kimmitt, who is heading the U.S. delegation.

He said the Bush administration was committed to improving economic prospects for Palestinian people "to give the political process a chance to unfold."

However, he acknowledged that the U.S. initiatives are primarily aimed at the West Bank and East Jerusalem, not the Hamas-controlled Gaza Strip.

Also participating in the May 21-23 conference will be Middle East envoy Tony Blair and French Foreign Minister Bernard Kouchner, as well as executives from major U.S. firms such as Intel Corp. <INTC.O>, Cisco Systems Inc <CSCO.O> and Merrill Lynch & Co.<MER.N>.

The U.S. officials acknowledged that restrictions on movement and checkpoints can bring business to a halt, and ongoing security problems are deterring investment, particularly from foreign firms. But a coordinated approach to security with Israel can help ease such bottlenecks, Kimmitt said.

"You cannot develop any Palestinian economy without easing up on checkpoints and mobility," said Ziad Asali, president of the American Task Force on Palestine, a Washington-based nonprofit group and a member of the U.S. delegation.

He said Israel has taken a "tiny baby step" towards addressing this issue by allowing increased mobility and access for the conference in Bethlehem, which he hoped develop into greater access for broader economic development.

HOME BUILDING BOOM

Asali said a key highlight will be opportunities in the home building sector, where there is much pent-up demand for housing in territories that have not seen any new towns or villages developed since the Israeli occupation in 1967.

Licenses to build up to 30,000 homes are now being considered, and key announcements on moving forward with construction are expected at the conference, he said.

"You can imagine the thousands of jobs that will be created instantly, that will be visible and palpable to the (Palestinian) people", Asali said.

To aid the housing sector, the U.S. Overseas Private Investment Corp. intends to announce a new $500 million fund to provide affordable mortgages to Palestinians of up to $75,000, said OPIC director Robert Mosbacher.

He said a partnership between OPIC, the Middle East Investment Iniative, the Aspen Institute and a Palestinian-based insurance firm would announce plans for a new insurance product aimed at trade disruption.

The insurance would cover up to $75,000 in losses from a disruption in business per incident, and this would help firms "wire around" sudden mobility or security problems.

WIMAX GRANT

Among grants to be signed at the conference is a $480,000 U.S. Trade and Development Agency grant to BCI Communications and Advanced Technologies, a Ramallah-based firm that is considering deploying high-speed wireless Web network based on the emerging WiMax technology. The grant will fund a feasibility study and development of a business plan.

WiMax, the next generation beyond short-range WiFi wireless communications technology, promises to blanket entire cities with Internet access for laptops, cell phones and other consumer devices at fast speeds.

USTDA director Larry Walther said the technology could bring down communications costs and put 45,000 more broadband Internet users online by its fourth year. The network would create a "window to the world" for Palestinians and help spur business activity, he said. (Reporting by David Lawder;)

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