Tony Blair has said his London conference has begun laying the "foundation stones" for a viable Palestinian state.

He said the gathering of representatives from 23 nations and six international organisations on Tuesday had been a vital step on the way to a lasting peace deal between Israel and the Palestinians.

A 17 page communiqué was drawn up by delegates who included US secretary of state Condoleezza Rice and UN secretary general Kofi Annan.

"What we have today is an agreement not just on behalf of the Palestinian authority that has got to usher in a state but also on behalf of the whole of the international community as to the practical steps, the foundation stones, to create that viable state in the future," Blair said.