Palestinian city scheme is hoped to stimulate further investment and job opportunities for the troubled region

The Palestinian city of Ramallah is to get a much needed $250m (£158m) development project with plans to build residential and commercial properties in the area, giving hope for further investment in the troubled region.

The Palestine Investment Fund (PIF) and the Saudi Arabian Land Holding real estate company last week announced a 50-50 joint venture called Arduna ("our land" in Arabic) which is the mixed-use development of Al-Ersal Street, Ramallah. The two parties said that in four to five years' time, it is expected that the project will offer commercial, retail and residential space of about 250,000 square metres.

The initial work on the project has already started with final touches being made onto the master plan. The project is first of its kind in Palestine, said Jamal Haddad, director of corporate relations at PIF, but the region is hoping it marks a starting point for further development.

"We are hoping this project will signal to potential future investors that even with sometimes difficult political and physical conditions we all struggle with, it is possible to invest in Palestine. We need more projects like this one in the region," said Haddad.

He said that there are many possible opportunities available and Palestine would be an ideal location for potential Western and Middle Eastern investors alike. "We were very persistent with our goals because we wanted to show investors that we have potential. Our way of doing business is very transparent and up to a standard of most Western companies here," said Haddad.

The project is expected to stimulate the Palestinian economy and attract investment outside the construction sector as well as bring much needed job opportunities to the region.