Officials of the US and Palestine have met virtually to renew the US-Palestinian Economic Dialogue, the first such meeting in five years, that was suspended by the previous Trump administration.

They discussed infrastructure development, renewable energy, and environmental initiatives, connecting Palestinian and American businesses, addressing obstacles to Palestinian economic development, and other topics, a US State Department statement said on Tuesday.

"The two sides concluded the dialogue agreeing to work on several crucial issues to advance the economic prosperity of the Palestinian people," said the statement.

Participants recognised the importance of restored political and economic relations between the US government and the Palestinian Authority and pledged to expand and deepen cooperation and coordination across a range of sectors, it said.

Two-state solution

US Assistant Secretary for Near Eastern Affairs Yael Lempert underscored the Biden administration's belief that Palestinians deserve to live in freedom, security, and prosperity.

"Growing the Palestinian economy will also play a critical role in advancing our overarching political goal: a negotiated two-state solution, with a viable Palestinian state living side by side in peace and security with Israel," she added.

Minister of National Economy Khaled Al-Osaily and other top officials represented the Palestinian side. 

Ties between Palestine and the US were strained in 2017 after former US president Donald Trump recognised occupied Jerusalem as Israel's capital.

The Palestinians seek statehood in the occupied West Bank, besieged Gaza, and East Jerusalem, territory Israel captured in a 1967 war.

Israel annexed East Jerusalem in a move not recognised internationally, and peace talks between the two sides broke down in 2014.